It looks like Hyundai and Kia’s plans to team up with Apple is dead in the water. Just last month, reports suggested that Hyundai, South Korea’s second largest conglomerate, will enter a partnership deal with Apple to develop autonomous electric vehicles. However, Hyundai has revealed that it is not in talks with Apple, sending shares tumbling by 6%, wiping US$3 billion (RM12.17 billion) off its market value, Reuters reports.

Shares for its affiliate Kia, which had been tipped in South Korean media reports as the likely operational partner for Apple, tumbled 15% – a US$5.5 billion (RM22.3 billion) hit. When news of the tie-up first broke, Kia’s shares increased by a staggering 61%. Korea Economic Daily TV reported that the Apple-Hyundai EV would hit markets by 2027, and the batteries would be developed at US factories operated by either Hyundai or Kia.

There are rumours of stock manipulation, but is it really the case? Hyundai is known to keep the bulk of its operations in-house. The report also mentioned that Hyundai has long been reluctant to work with outsiders, which is why it develops and manufactures its own engines and transmissions. Its supply chain structure (suppliers, distributors and retail network) is also vertically integrated, allowing for huge cost and operational efficiencies, as well as control.

Several people familiar with the matter also said the decision to work with Apple was an “agonising” one to make. “We are agonising over how to do it, whether it is good to do it or not. We are not a company which manufactures cars for others,” said the anonymous source.


The eight-speed DCT in the i30 N facelift was completely developed and manufactured by Hyundai

As all these unfold, Apple continues to remain tight-lipped. It never once acknowledged talks with Hyundai about building autonomous vehicles. Analysts said the deal could have fallen through due to leaks of the partnership plan to the media, or over possible insistence by Apple that Hyundai’s role in any tie-up would be that of an equipment manufacturer, rather than a strategic partner.

An analyst at eBEST Investment & Securities, Kevin Yoo said: “It seems clear that Hyundai Motor Group has not been too happy with dealing with Apple… They made it clear that they do not want to be treated just as Apple’s supplier or manufacturer.”

With Hyundai out of the picture, how will Apple decide to move forward with its “Project Titan?” Who will it team up with to produce its autonomous electric car, and who will be the manufacturer of its “breakthrough” battery technology that is tipped to be introduced by 2024? Only time will tell.