Apple Car manufacturing deal with Hyundai in doldrums over partnership concerns

After news of an autonomous passenger vehicle by Cupertino tech giant, Apple Car surfaced, it was reported that Apple would partner with Hyundai to assemble the automobile at its manufacturing sites in the United States. However, Reuters claims that the Apple Car deal with Hyundai might not materialize due to the manufacturer’s concerns about becoming a “contract iPhone maker” like Foxconn.

Although launched in 2014, the project had not made any significant progress until now because of internal rifts, leadership issues, and production problems. However, with the appointment of a former engineer at Tesla, Doug Field in 2018, and Apple’s AI and ML chief, John Giannandrea as Head of Project Titan in 2020 has resuscitated. It is reported that Apple is working on developing revolutionary battery and LiDAR scanners for its autonomous automobile but it seems like the Apple Car project might be facing problems.

While the talks are at an early stage, Hyundai Motor Group has “tentatively decided” that it would want Kia to partner with Apple, not Hyundai Motor, a Hyundai insider said.

Apple Car

Hyundai not willing to become a “contract phone maker” for Apple by manufacturing Apple Car

People familiar with the decision have told Reuters that Hyundai executed have expressed concerns about the company’s image and future after getting into a partnership with Apple.

“The Group is concerned that the Hyundai brand would become just Apple’s contract manufacturer, which would not help Hyundai in its effort to build a more premium image with its Genesis brand,” the insider said. Kia is also moving faster in terms of electric cars, and it has available production capacity at its Georgia factory in the United States.

Another executive at Hyundai said: “Tech firms like Google and Apple want us to be like (contract phone maker) Foxconn.

“A cooperation may initially help raise the brand image of Hyundai or Kia. But in the mid- or longer-term, we will just provide shells for the cars, and Apple would do the brains.”

Nevertheless, there are broad areas where the two companies could benefit, including access to Hyundai’s electric car platform and its suppliers, such as battery makers, as well as access to Apple’s autonomous vehicle stack and software, said Park Chul-wan, a South Korean battery expert and a professor at Seojeong University.

“Hyundai would be more than just a Foxconn,” he said.

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