South Korea’s Hyundai Motor Co said on Friday it was in initial talks with Apple after a national broadcaster said the companies were discussing an electric vehicle and a battery connection, causing Hyundai’s shares rose 25%.

The report comes weeks after we reported that Apple was advancing autonomous car technology and aimed to produce a passenger car that could include its own innovative battery technology starting in 2024.

Earlier on Friday, Korea Economic Daily TV said the iPhone maker and Hyundai were in talks to develop autonomous electric vehicles by 2027 and develop batteries in US factories operated by Hyundai or its affiliate Kia Motors Corp. The broadcaster did not cite sources. . for your report.

“Apple and Hyundai are under discussion, but since it is an early stage, nothing has been decided,” Hyundai said in a statement. He did not say what the talks were about and omitted a reference in an earlier statement that Apple was in talks with other global automakers, as well as Hyundai.

In a later regulatory filing, the automaker did not name Apple, saying it was “receiving requests for cooperation for the joint development of autonomous electric vehicles from several companies,” without identifying any of them.

Apple declined to comment.

Reviews of Hyundai’s statement suggest that it is likely to be more cautious with future communications about any possible association with the iPhone maker, which is known to keep product plans under wraps.

An Apple-branded car could be a major challenge for electric vehicle (EV) market leader Tesla Inc. It is unclear who would assemble such a car, but analysts have said they expect the company to rely on a partner. manufacturing to build vehicles.

“We continue to firmly believe that Apple finally announces a strategic electric vehicle partnership in 2021 that lays the foundation for entering the burgeoning electric vehicle space,” Wedbush analysts said in a note.

Hyundai and Apple already work together on CarPlay, Apple’s software for connecting iPhones to vehicles from a variety of automakers.

“Apple’s outsourcing of car production to Hyundai makes sense, because (the Korean firm) is known for its quality,” said Jeong Yun-woo, a former Hyundai designer and a UNIST professor in South Korea.

“But I’m not sure if it’s a good strategy for automakers to be like Apple’s Foxconn, as automakers face risks of losing control of technology companies,” he added, referring to the supply contract for the Taiwanese manufacturer with Apple on iPhones.

Analysts said Apple may be interested in using Hyundai’s electric car platform and facilities to lower vehicle development and manufacturing costs.

“Apple could see Hyundai as an ideal partner, because when it comes to legacy American automakers, they all have a strong bond, which Apple would like to avoid,” said Kevin Yoo, analyst at eBEST Investment & Securities.

“Also, their labor cost (of legacy American automakers) is much higher than Hyundai’s, which often plays a big role when it comes to car production.”

An alliance with Apple would be a big boost for the automaker, whose global sales fell more than 15% last year as the pandemic hit demand. Friday’s share price surge added nearly $ 8 billion to Hyundai’s market value.

Hyundai, the longtime champion of rival hydrogen fuel cell cars, recently raised the stakes on battery-powered electric cars, a move investors welcome in the face of Tesla’s recent success.

The South Korean company, which sources batteries from SK Innovation Co Ltd and LG Chem Ltd and others, is expected to launch its first car based on a dedicated platform for electric cars known as E-GMP earlier this year.

In 2019, Hyundai and auto parts supplier Aptiv launched a $ 4 billion venture to develop autonomous driving technologies, naming it Motional. Last month, private transportation company Lyft and Motional said they would launch a robo-taxi service in several US cities in 2023.

Hyundai does not have dedicated electric car factories in the United States and may have to obtain the consent of its powerful union in South Korea if it seeks to build electric vehicles abroad, analysts said.

Shares of Hyundai Motor rose as much as 24.8%, reaching a more than seven-year high of 255,000 won, before closing 19%. Auto parts maker Hyundai Mobis Co Ltd ended the session 18% higher, while Kia shares rose 8.4%.

Battery makers also gained ground, with SK Innovation closing 7.6%. The broader KOSPI market closed up 3.97%, after rising as much as 4.3% during the session.

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