Apple could invest as much as $3.6 billion, or 4 trillion South Korean won, in Kia Motors as part of a deal to get its long-rumored Apple Car into production.
The report came from Korean news outlet DongA Ilbo which quoted Ming-Chi Kuo, an analyst at TF International Securities. Kuo expects Apple’s new battery-electric vehicle will make use of a platform developed by Kia parent Hyundai Motor Group, and it will be assembled at the Kia Motors Manufacturing plant in West Point, Georgia.
The Apple-Kia deal, said Kuo, could be inked by Feb. 17. But it may not be monogamous, according to the analyst who, in a new report, suggested Apple could add alliances with several other automakers, including General Motors and Stellantis, the latter recently formed by the merger of Fiat Chrysler Automobiles and France’s PSA Group.
Apple could seek multiple auto partners
“Apple’s deep collaboration with current automakers … who have extensive development, production and qualification experience will significantly shorten the Apple Car development time and create a time-to-market advantage,” wrote Kuo.
For the record, Hyundai acknowledged the discussions, adding “Nothing has been decided.” A well-placed insider at the Hyundai Motor Group (HMG) confirmed to TheDetroitBureau.com that the talks are, in fact, moving along rapidly.
Separately, Carlos Tavares, the new CEO of Stellantis, said during a Jan. 19 news conference that “Working with Apple or any tech company is something we are open to.” The PSA side of the company already has limited relations with Apple.
Initially, Apple appeared set to go into the car business entirely on its own several years ago, but it terminated a large portion of the staff assigned to Project Titan, its electric vehicle program. It was left unclear whether the effort was entirely abandoned or rolled back. The latest expectations are that the tech giant wants to avoid the incredibly difficult task of setting up its own manufacturing network to focus, instead, on what it does best.
“We believe that Apple will leverage current automakers’ resources and focus on self-driving hardware and software, semiconductors, battery-related technologies, form factor and internal space designs, innovative user experience, and the integration with Apple’s existing ecosystem,” wrote Kuo.
Apple’s long-term production targets could be substantial
Kuo and other observers believe the talks would see Kia produce an initial 100,000 vehicles annually for Apple starting in 2024, with a potential for boosting that to 400,000 later. Whether the West Point plant could handle that, at least by expanding its manufacturing footprint, however, is unclear.
Exactly what sort of vehicle – or vehicles – Apple would build remains a closely held secret. While early
plans were thought to focus on an all-electric sedan, the realities of today’s market would likely lead it to focus on some sort of utility or multi-purpose vehicle.
Apple’s high-tech focus could offer some insight, said Sam Abuelsamid, principal auto analyst with tech research firm Guidehouse. He believes they well may “aim for robotaxis, which I think is the more likely scenario” than producing vehicles to be sold to retail customers. That could put it in competition with Waymo, the spinoff of Apple archrival Google.
According to Asian market analyst Kuo, the premium version of the vehicle under development would be able to get as much as 300 miles per charge and add another 60 miles after plugging in for five minutes. It would be capable of launching in 3.5 seconds from 0 to 60, taking advantage of the instant torque of electric motors, with a top speed of 160 mph. But less expensive vehicles delivering less range and performance would also be offered – in line with what EV competitors such as Tesla and Ford are doing.
Analyst sees better alignment between Apple and Canadian contract manufacturer Magna
Teaming up with an established manufacturer makes sense, said Stephanie Brinley, principal auto analyst with IHS Markit, at least for Apple, but, for the Hyundai Motor Group, she added, “There are benefits – and risks – to being a contract manufacturer for Apple.”
On the positive side, such a deal would improve the South Korean carmaker’s economies of scale. But it could cause
challenges when it comes to branding, among other things.
Brinley also questioned whether Apple might not be better served by talking to a company like Magna. The Canadian mega-supplier already has a significant business going as a contract assembler for brands as diverse as Jeep and Mercedes-Benz.
Magna recently announced that it will provide the underlying platform for EV startup Fisker, and build its Ocean SUV out of the Magna-Steyr plant in plant in Graz, Austria. Magna said it is looking for other similar deals and would be willing to erect a new assembly plant in North America if needs dictated.
In China, meanwhile, a similar strategy has been laid out by Foxconn. And that tech company already has a solid relationship with Apple producing its iPhones and other products.
The latest reports on an Apple-Kia deal have had little apparent impact on the tech firm’s stock price, but Hyundai shares have surged from around $50 at the beginning of the month to a high of as much as $57.