Despite 'no' Apple talks, Kia still considered as 'iCar' partner

Discussions could resume at any time

By Anna J. Park

Hyundai Motor and Kia have officially said that they are not currently holding talks with Apple on co-developing self-driving electric vehicles (EVs). In both companies' public announcements Monday morning, they released almost identical statements with slightly different wording.

“Hyundai Motor has had requests for the joint development of autonomous electric vehicles from various companies, but nothing's been decided at this early stage. We are not holding talks with Apple on autonomous EVs,” Hyundai Motor's statement read.

“Kia is reviewing joint cooperation projects on autonomous EVs with various overseas companies, yet nothing's been decided. The firm is not holding talks with Apple on autonomous EVs,” read Kia's.

With the denials by the two companies about the media-hyped joint development deal with Apple, the firms' share prices fell sharply. Hyundai Motor's stock fell 6.21 percent to 234,000 won at the close; while Kia's share price nosedived 14.98 percent to end at 86,300 won.

Shares of other Hyundai affiliates, such as auto parts companies Hyundai Mobis and Hyundai Wia as well as auto logistics and distribution firm Hyundai Glovis, all dropped on the market. Mobis ended at 322,200 won, down 8.65 percent, while Glovis lost 9.5 percent to close at 200,000 won, according to the Korea Exchange.

Since mid-January, media reports here have said Hyundai and Apple were close to signing a joint development deal on Apple's EV, with Kia handling the initial production of the tentatively nicknamed “iCars,” which could be available by 2024 at the earliest.

However, despite the official denials through regulatory filings, some market watchers still think that cooperation might be ongoing behind closed doors, or could resume at any time if discussions have been “paused” for the time being.

“The official statements by the firms seem to be announced in order to respect the type of non-disclosure agreement (NDA) Apple is known to make its cooperation partners sign prior to finalizing a deal,” a market watcher said on condition of anonymity, explaining that Apple is known for keeping a high level of secrecy regarding its research and development of new products.

“At this point, it's true no one can be sure of whether the joint deal between Hyundai Motor and Apple will be reignited or not. Kia's plant in the U.S. state of Georgia could still be considered as a partner in manufacturing Apple EVs, as the Korean car firms' Monday announcements simply said they're currently not in talks with Apple about self-driving vehicle development. Kia might still work with Apple in manufacturing the tech-giant's EVs,” the market watcher continued, stressing that Kia's announcement did not preclude that possibility.

Another researcher in the automotive industry said the discussions could resume at any time.

“I think discussions with Hyundai Motor, the major stakeholder in Kia, could resume at any time, as now is only the very early stages of Apple's EV project. However, it seems Apple has the upper hand in discussions with Hyundai,” the researcher said.

Whatever the final result of the Hyundai-Apple EV saga, Hyundai affiliates' share prices will be exposed to higher volatility for the time being.

“As Hyundai affiliates' stock prices have enjoyed bullish moves amid expectations about the Apple car project since early this year, they will face bigger volatility over the short term,” Heungkuk Securities said in a report, also released Monday.