Hyundai, Kia loose $8,5bn on failed tie-up with AppleEuropost
Car makers Hyundai and Kia suffered heavy losses as prospects for potential deal with tech giant Apple were officially put to an end, Reuters reported. The stock markets have wiped a total of at least $8,5 billion off the share value of both companies after the announcement.
Numerous rumors over the past weeks have fueled expectations of potential deal targeted at joint development of autonomous electric cars. The rumors were further supported by Hyundai’s announcement a few weeks ago that it had early talks with Apple. Speculations were linked to Hyundai’s affiliate Kia as possible production partner. The expectations stimulated robust demand and price growth of the shares of both car makers. However, everything collapsed on Monday as Hyundai denied any progress in the talks.
“We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided,” the automakers said on Monday, in compliance with stock market rules requiring regular updates to investors regarding market rumours. “We are not having talks with Apple on developing autonomous vehicles,” Hyundai said in a statement.
As recently as last week, media outlets including CNBC reported that a deal was close to being finalised. One South Korean report said the two companies were set to sign the deal on 17 February. Hyundai is traditionally known for its reluctance to work with outsiders, making engines, transmissions and even its own steel in-house in a vertically integrated supply chain as South Korea’s second-largest conglomerate.
Reuters reported in December that Apple was moving forward with autonomous car technology and aimed to produce a passenger vehicle that could include its own breakthrough battery technology as early as 2024. Apple, known to keep product plans under tight wraps, has never acknowledged talks with the automaker about building vehicles.