South Korea’s Kia and Hyundai are no longer in talks with Apple (AAPL) on an electric vehicle, after reports surfaced that an Apple car production deal could come as soon as next week.
Discussions between Apple and Hyundai “paused recently” and the iPhone maker is in similar discussions with other automakers, sources told Bloomberg. The South Korean carmakers confirmed they are no longer in talks on an Apple car in regulatory filings.
In January, Hyundai initially confirmed and then dialed back a statement talks with Apple on an autonomous EV. That announcement and a slew of media reports about talks have “upset Apple,” which is notoriously secretive about its product roadmap, the report added.
Meanwhile, Bloomberg added that Kia and its parent Hyundai are jostling with each other for the Apple car deal. That deal has the potential to disrupt Tesla (TSLA), General Motors (GM) and their peers, while transforming the auto industry.
Apple declined comment to Bloomberg.
In a note Monday, Morgan Stanley analysts discussed past moves that could signal a future Apple car.
First, analyst Katy Huberty noted Apple’s SVP of Hardware Engineering Dan Riccio’s move to a new role that is “probably” the Apple Car project. (But Bloomberg reported Monday that Riccio is focused on future AR/VR headsets).
In addition, Huberty noted Apple’s history of integrating hardware, software and services to improve the consumer experience. The iPod, iPhone and Watch created markets exponentially larger than the ones they entered, and an Apple car could fit that pattern, she suggested. Finally, an Apple car would align with CEO Cook’s higher focus on the economic divide coming of Covid-19 and climate change/ESG matters, as his comments on the latest earnings call revealed.
Apple Car, EV Stocks
Shares of Apple edged up 0.1% to 136.91 in Monday’s stock market. Kia shares dived in South Korea on the Apple Car news.
Apple stock is below a 138.89 buy point confirmed via Leaderboard in a third-stage base, after nearly doubling from a breakout in April, according to MarketSmith chart analysis. The buy range goes to 145.83. Among other EV stocks, Nio (NIO) added 4.2%. Tesla (TSLA) rose 1.3%. GM, which aims to exclusively build electric cars by 2035, gained 4.5%, hitting a record high.
Both Apple and Tesla stock are on the IBD Leaderboard, a curated list of stocks with the most potential for big gains. Tesla stock is far extended from a 466 buy point cleared in November.
Last week Bloomberg reported that Apple will invest $3.6 billion to build Apple cars at a Kia facility in Georgia, citing a report out of Korea.
That report even said a deal could come Feb. 17 with Apple cars launching in 2024. Apple and Kia were said to be initially targeting 100,000 Apple cars a year.
Apple’s self-driving car effort, Project Titan, made headlines a few years ago. Reports then died down until Reuters reported a potential Apple car in 2024.
For automakers, partnerships with tech giants could ease the high costs and complexities to build more connected, electric and driverless cars.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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