Could the Apple Car Be Made by Hyundai?

Apple Car Concept 2 Credit: Alex Imnadze via Motor1
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Despite many recent rumours that Apple is planning on building a complete electric car on its own, it looks like the company may be reaching out for some help from at least one more traditional automaker after all.

According to Korean Economic Daily (Google Translate), Apple may be planning to partner with Korean automaker Hyundai Motor Group to launch the Apple Car, although it’s unclear yet exactly what form that partnership may take.

At this point, it seems that the two companies are in preliminary talks about how they could cooperate on building the car, which according to all reliable reports is still years away, however it’s uncertain whether Hyundai is Apple’s preferred choice or only one of several companies that the tech giant could be in negotiations with.

While the Korean news report suggests that the negotiations are further along, after CNBC reached out to Hyundai, the company responded by saying that the discussion is at its “early stage” and that nothing has been decided, while also adding that it also isn’t the only automaker that Apple is talking to.

About 30 minutes later, however, Hyundai began backpedaling, revising its statement to omit any mention of other automakers, and then a few hours after that it omitted Apple’s name entirely, telling Bloomberg and others that it had simply been contacted by “various companies.”

We’ve been receiving requests for potential cooperation from various companies regarding development of autonomous EVs. No decisions have been made as discussions are in early stage.

Hyundai

Of course, even though it’s common industry knowledge that Apple is working on a car project — it’s really one of the company’s worst-kept secrets at this point — the fact is that Apple hasn’t actually said a single word about the project, and therefore it doesn’t officially exist outside the rumour mill. So, it’s likely that Hyundai was speaking out of turn, and forced to walk back its statements to avoid incurring Apple’s wrath.

Whether Hyundai’s slip-up will be enough to sour the negotiations between the two companies remains to be seen, but it definitely shows that Apple is at least considering who it may partner with for its ambitious automotive project.

How to Succeed in the Electric Car Business

There’s actually been a fair bit of debate among analysts and other industry-watchers whether Apple could ever pull off building and marketing an actual vehicle on its own, with two equally valid but opposing viewpoints.

On the one hand, many believe that Apple simply can’t pull it off with its own resources, and therefore needs to partner with a traditional carmaker, not only for production capabilities, but also simply to sell and market its vehicles.

Apple needs to partner with a carmaker because it doesn’t have production capabilities and sales networks to sell its cars. Building up those capabilities can’t be done quickly so Apple will need a partner for that.

Lee Han-Joon, KTB Investment & Securities analyst

There’s some logic to this, as established carmakers have massive production and distribution capabilities, and it’s hard to imagine Apple Stores turning into car dealerships or even showrooms, the counterpoint to this argument is that Tesla seems to have been quite successful in going it on its own, eschewing traditional dealerships in favour of more boutique style showrooms. In fact, Toronto’s flagship Yorkdale Shopping Centre boasts a Tesla store located directly across from the Apple Store.

So it’s hard to believe that Apple — a company worth $2 trillion and has shown legendary prowess at building and managing supply chains — would have any real difficulty building its own production and distribution network for the Apple Car, so the real question doesn’t really come down to whether Apple can do this as much as whether it’s the best use of its resources, and that’s a much more complicated question.

It’s fair to say right now that Apple may not have even come to a decision yet, and may just be considering its options. Certainly there’s been enough evidence that Apple wants to try and build an electric car on its own, since it’s been recruiting an Apple Car Dream Team for years now, made up of top-notch talent whose skills go well beyond simple autonomous driving systems — people Dr. Michael Schwekutsch, Tesla’s former VP of engineering who specializes exclusively in EV powertrains — whose skills would be almost useless to Apple if it were simply going to let somebody else build the Apple Car.

That said, there’s designing a car and then there’s actually building it, and at this point the most likely purpose of Apple’s discussions with Hyundai and other automakers is simply to leverage their manufacturing capabilities to produce a car designed and engineered exclusively by Apple. In this case, a traditional automaker would simply be providing the “grunt work” of churning out vehicles, effectively becoming to the Apple Car what Foxconn is to the iPhone.

When’s the Apple Car Coming?

On the flip side, it looks like an actual Apple vehicle may not arrive until the latter half of this decade, with Bloomberg’s Mark Gurman noting that development remains in the early stages, making it all the more likely that Apple is really just exploring its options.

This conflicts with two other recent reports, including a very dubious one out of Taiwan that suggested the Apple Car could actually show up later this year, even if it’s only as a preview, followed by news from Reuters that pegged the car as being on track for 2024, aligning with earlier predictions by veteran analyst Ming-Chi Kuo.

However, even Kuo has modified his timeline since the Reuters report, saying that it now looks like an Apple Car won’t launch until 2025-2027 at the very soonest, which generally lines up with Gurman’s timeline. Tesla founder and CEO Elon Musk also cast doubt on Reuters’ information, suggesting that the “next-level battery technology” outlined in the report was “electrochemically impossible,” while also claiming that he offered to sell Tesla to Apple at a discount several years ago.

Gurman naturally offers some more colour on these predictions, however, adding that the vehicle side of the project is still only being run by a “small team of hardware engineers” who are working on everything from drive systems to interior and exterior physical design, while also adding even more ex-Tesla executives to the project.

At this point, however, Apple engineers that Gurman has spoken with have shared that not only is the car “nowhere near production stage,” but it’s also been slowed down due to the need to work from home during the pandemic, since it’s obviously a project that requires much more hands-on work than most.

With the Apple Car, however, it’s also not just about hardware, and Gurman confirms that Apple is looking to build the ultimate self-driving system, which lines up with news late last year that the project has been shifted to Apple’s Artificial Intelligence division, which is likely where most of the challenges now lie.

The goal is to let a user to input their destination and be driven there with little or no other engagement, according to the people familiar with the project.

Mark Gurman, Bloomberg

With Gurman and Kuo both predicting a 5–7 year timeline, however, Reuters may not be all that far off, since if Apple planned to release a car on the earlier side of that timeframe, it would need to start trial production as soon as late 2024.

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