(Bloomberg) – Speculation that Apple Inc. is looking for a partner to develop its own electric vehicle has swept South Korea and Japan, where the shares of major automakers have soared in reports of discussions with the iPhone maker.
Kia Motors Corp. is talking to potential partners about a plan to assemble a car designed by Apple, the Wall Street Journal reported on Friday. Separately, the Nikkei newspaper said Apple is in talks with at least six automakers. The conjectures surrounding Apple’s secret project to design and sell its own car resurfaced in December after a hiatus of several years, with Hyundai Motor Co. mentioned as a potential partner.
The key question is how serious Apple is in facing Tesla Inc. and other electric vehicle manufacturers, and whether it has determined that it will need an established manufacturer in order to launch its own product. The Cupertino, Calif.-Based company is said to have a small team of engineers developing drive systems as well as designers, but with development work at an early stage, any implementation is likely to happen only in the next five years.
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Tatsuo Yoshida, senior analyst at Bloomberg Intelligence, said Japanese automakers are often too busy with their own development, manufacturing, sales and customer service to take on a task like working with Apple. However, Nissan Motor Co. or Mitsubishi Motors Corp “don’t have a lot of work and are a little idle, so you can apply,” he said.
When asked if they were approached, Honda Motor Co. and Mazda Motor Corp. said they couldn’t comment, said Nikkei. Mitsubishi Motors said it was not contacted and Nissan declined to comment, according to the report. The chief financial officer of Subaru Corp. said in a conference call that he had heard nothing about an Apple car.
Kia’s shares rose 1.5% in Seoul, adding to gains earlier this week in a local media report that Apple would invest 4 trillion won ($ 3.6 billion) as part of a collaboration with the automaker in the manufacture of EVs. In December, Hyundai dropped a statement that said it was in talks with Apple.
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The Journal reported that an agreement between Apple and Kia will involve a multi-billion dollar investment, with assembly to be carried out in the state of Georgia. This week, CNBC reported that Apple is close to finalizing an agreement with Hyundai-Kia to build a stand-alone EV at Kia’s US plant. No deal has been reached, but they are scheduled to go into production in 2024, the news channel said.
A Kia representative declined to comment.
Hyundai has developed a new EV platform and plans to build 23 EVs, starting with the Ioniq 5 in March in Europe, followed by a Kia model later this year. EVs made on the platform will be able to charge up to 80% of capacity in 18 minutes and add up to 100 kilometers (62 miles) of autonomy in just five. They will have a maximum range of 500 kilometers on a single charge. Hyundai aims to sell 1 million cars by 2025.
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In Japan, the report generated gains among automakers, which in turn boosted the Topix benchmark, with Toyota Motor Corp., Mitsubishi Motors and Nissan growing. Mazda’s shares also jumped 19%, the maximum in 12 years, after the company raised its operating profit forecast for the entire year.
Among Japanese automakers, Nissan probably has the right solution for a manufacturer that does not want to enter the electric vehicle market. The Japanese automaker has developed with the French partner Renault SA a common EV platform that can be used to develop products from distinct brands for its global alliance of car manufacturers, which also includes Mitsubishi Motors.
Nidec Corp., a major Japanese supplier of electric motors, is also looking to offer almost complete EV platforms. Jun Seki, the company’s chief operating officer, said in a recent interview that new players in the industry prefer to focus on the interior and style of a vehicle.
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“Any new company entering the electric vehicle realm is a chance for us,” said Seki. “Our expectations for Apple are quite high. Apple is our important customer in other areas as well. “
(Updates shares.)
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