Hyundai Motor and Apple are negotiating a partnership in the field of self-driving EVs, reports the Korean newspaper Korea IT News. Other media reported that Hyundai and Apple are aiming to launch a self-driving EV in 2027. Soon after this report, Hyundai announced that it was in early stage talks with Apple. (The above is excerpted from Newsweek)
Hyundai is playing a central role in the Apollo Project, the self-driving EV strategy of Chinese IT giant Baidu and is also actively mass-producing EVs.
As for batteries for EVs, Korea has sufficient knowledge about EVs, with Samsung Electronics producing for German manufacturers and LG Chemical supplying U.S. manufacturers, and with the development and production of large lithium-ion rechargeable batteries for automobiles in full swing from the late 2000s to early 2010.
Given the social situation in Korea, Apple’s consideration to outsource EV production to Hyundai makes sense to those in the automotive industry. Apple is a so-called fabless company, which means that it plans and designs its products and leaves the production to outside companies. The fact that the iPhone is actually manufactured by Foxconn in Taiwan is a good example of this.
Considering the fact that Apple will not build its own production plant for EVs but will look for a company to outsource the production like it does for its existing products such as the iPhone, the rumor of collaboration with Hyundai has a lot of weight to it. (The above is an excerpt from Kuruma News)
Source: Newsweek , Kuruma-News (The original article was partially revised by the author.)
PSR Analysis: As of today (Jan. 18) neither Hyundai nor Apple has made any official announcement on this matter, so we don’t know the truth yet. However, since about 4-5 years ago, the automotive industry has been shifting from development by single manufacturers to collaboration with IT companies represented by sensor technology companies and mapping technology companies, and this story has been attracting a lot of attention because it is on a large scale among such trends.
The details of the collaboration have not been made public yet, but as the article explains, Apple’s technology will be of great use to Hyundai, not only in the area of automated driving, but also in improving the convenience of the car interior.
For Apple, outsourcing the production of cars to Hyundai will not only reduce the cost of large capital investments, but it will also further enhance its international presence in the automotive industry by working with Hyundai, which has sales networks in many regions.
The question is whether the company will comprehensively manage the concept of self-driving EVs and turn it into “Apple Car” or whether it will remain at the level of providing some technology to Hyundai.
It is also interesting to see what kind of profit structure they will establish. Normally, the main source of profit for sensor and mapping companies working with automakers is licensing revenue per vehicle. Many ideas will be considered as to how to secure stable revenue.
For IT companies that provide technology to automakers, the author predicts that the trend of contracting in the form of so-called subscription fees will grow in the future, but for both IT companies and automakers, securing profits depends on the number of EVs sold in the big picture.
In the future, there will be a noticeable trend toward differentiation from other companies, not only in terms of cruising range and driving performance, but also in terms of convenience and comfort of living space.
How will Apple, the IT giant, increase its presence in the automotive industry, and how will Hyundai, Korea’s leading automaker, perfect Apple’s technology in the form of an automobile? The moves of both companies will create a stir in the future of EVs. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia for Power Systems Research
