Do we have confirmation of Apple’s car ambitions thanks to Hyundai?
- For years it has been widely speculated Apple is looking to enter the auto and transportation space.
- On Friday, South Korean automaker Hyundai confirmed it held talks with Apple.
- However, talks were in the early stages and it is unclear what will transpire next.
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Tech giant Apple Inc. (NASDAQ: AAPL) was rumored to be interested in developing a car for years but on Friday we might have confirmation this is very much in the iPhone maker’s plans.
Hyundai held talks with Apple
South Korean automaker giant Hyundai Motor Co. saw its shares skyrocket 24% on Friday after the company confirmed it held talks with Apple. Hyundai released a brief statement confirming conversations with Apple were in an “early stage” although “nothing has been designed,” The Wall Street Journal reported.
Hyundai is among the world’s largest automakers in terms of global sales so it certainly boasts the necessary expertise in manufacturing a car at a large scale. But nothing has been confirmed between Hyundai and Apple.
Separately, Apple has been busy over the past few weeks in reaching out to auto part suppliers and could start producing its own cars as soon as 2024, a source told WSJ last month.
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What else do we know about Apple’s car?
Apple’s ambitions in the car space were never clear but Friday’s confirmation from Hyundai of talks at least confirms some sort of auto plan is on the table. Prior media speculation suggested Apple would like to outsource vehicle assembly production to a third party, according to WSJ.
We do know that Apple has many workers in its roster with particular experience in cars. Most notably, former Tesla Inc (NASDAQ: TSLA) engineering chief Doug Field was credited with playing a very senior role in developing the Model 3 car. He left Tesla in 2018 for Apple and it is only natural for investors to speculate he was brought on to work on a car project.
Apple has lots of cash to spend
Apple’s cash hoard stood at $192 billion as of September and its rate of growth could even accelerate in the upcoming 5G cycle. So naturally, auto industry executives are worried Apple could flex its muscles in a major way and shake up the market.
The legacy auto industry is stuck in a hard position. After decades of building gas-powered vehicles and investing billions of dollars in gas-powered vehicles, a complete refresh might be needed to transition towards electric vehicles.
By contrast, Tesla’s entire infrastructure was built with a focus on electric vehicles. Apple would most certainly follow a similar strategy — that is if it decides to start from scratch.
Notable tech and Apple analyst Dan Ives said in a note to clients that “many on the Street would rather see Apple partner on the EV path, than start building its own vehicles/factories,” according to WSJ. The Wedbush analyst further added that a partnership would alleviate some of the strategic product risks around “such a gargantuan endeavor.”
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