Some have raised concerns that the giant could be just a contract manufacturing company with the US tech giant, casting a shadow over the prospects for the deal.
Hyundai said earlier last month: It is in initial talks with Apple, but did not give details, and local media said: The companies are discussing cooperation on an electric car and a battery.
Apple has never admitted to having talks with the automaker about building vehicles, and it was not clear if any of those talks were still active.
The iPhone manufacturer usually insists on the strict confidentiality of its potential partners and suppliers about future plans or products that have not been launched.
We are agonizing over how to do it, whether it is good or not, said a Hyundai executive with knowledge of internal discussions about the partnership with Apple.
“We’re not a company that makes cars for others, and it’s not as though working with Apple always leads to great results,” he added.
Few details are known about the conversations between the two companies, but the options discussed include Hyundai or Kia as a manufacturer of cars designed by Apple and sold under its ubiquitous powerful brand.
Hyundai has traditionally been known for its reluctance to work with outsiders, as it manufactures engines, transmissions and even its own steel in-house as part of the vertically integrated supply chain as the second largest conglomerate in South Korea.
Despite the rise in shares in Kia and Hyundai due to the talks, but there is great opposition to becoming a manufacturer of Apple contracts, which could hamper any deal with the US giant.
Apple and Hyundai first began talks about the auto partnership in 2018, when Alexander Hitzinger, now a Volkswagen CEO, was heading Apple’s automotive effort, known as Project Titan.
Progress has been hampered by the South Korean carmaker’s reluctance to work with outsiders, as it is very difficult for Hyundai to open up.
The South Korean company will likely have to replace some executives to avoid a culture clash under any partnership with Apple.
Apple prefers to source the key components for its own design – tires, bodies and other parts – from a variety of places and relies on Hyundai or Kia for final assembly, and Apple wants this to be in the United States.
The group is concerned that the Hyundai brand will simply become a contract manufacturer of Apple, which will not help Hyundai in its efforts to build a more distinctive image with its brand, Genesis.
Kia is also moving faster in terms of electric cars, and has production capacity available at its plant in Georgia, in the United States.
There are broad areas in which the two companies could leverage, including access to Hyundai’s EV platform and its suppliers, such as battery makers, as well as access to Apple’s independent vehicle lineup and software.