• Mon. Jun 14th, 2021

Hyundai’s Executives cautious about collaborating with Apple to make Electric cars; they say it will make Hyundai a contract manufacturer


Feb 9, 2021

According to Reuters, some of the top administrators at the South Korean motor company are at crossroads deciding whether they should partner with Apple to make electric vehicles. In January 2021, Hyundai revealed that it was in talks with the American tech giant to make an electric car. Top executives at Hyundai think this will reduce the company into a contract manufacturer, thereby reducing its efforts in building a more premium image with its newest release, the Genesis brand. “We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results,” the executives said.

 Apple is known to design, brand, and sell products they didn’t get involved in manufacturing. They are the brains behind the outlook of the product but shy away from the actual production. For instance, the famous iPhone brand is produced by Foxconn, a contract phone maker. Foxconn is a Taiwanese electronics manufacturer, which is Apple’s major ODM (original design manufacturing). Other items under Foxconn’s production include Nokia, IPod, IPad, and Blackberry.

Media reports projected that Hyundai would strike a deal with Apple by March 2021. This deal would see the motor company produce a ‘beta’ version of an electric car for Apple by 2022. Full-scale production will commence by 2024 if this deal goes through. However, Apple has never come forward to clarify these speculations. When contacted by Reuters for a comment, they did not say a word.

Sources close to the alleged deal revealed that if this agreement went through, one of the two companies owned by the Hyundai Motor Co. Group would produce the EV that is, Hyundai or Kia. “A co-operation may initially help raise the brand image of Hyundai or Kia. But in the mid or long-term, we will just provide shells for the cars, and Apple would do the brains,” said one of the Executives to Reuters.

Hyundai Motor Co. Group’s possible choice for a production deal is Kia. According to inside sources, the parent company “tentatively decided” it would prefer Kia to partner with Apple. Kia Corporation was founded in 1944. Its headquarters are in Seoul. Hyundai Motor Company purchased Kia in 1998. It owns 33.88% of the carmaker’s shares. Kia has a car factory in Georgia, United States. Some of the brands manufactured here include the Telluride CUV, Sorento CUV, and the Optima sedan.

Executives at Hyundai said that “tech companies like Google and Apple want us to be like Foxconn.” The parent company also thinks Hyundai is not the best fit for this contract. “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.” Hyundai recently released its latest luxury car, the Genesis G90 sedan.