Hyundai Executives Said to Be 'Divided' Over Prospect of Apple Car Partnership

[FNH15]

Hyundai...I mean, it'd be nice if they partnered with a car company that made fun to drive vehicles like Audi or Infiniti.

They are going to end up charging 75k for a friggin Hyundai. No thanks.

Apple and Porsche seem like a natural fit. Both are known for excellent products which are at the top of their respective markets, and both are in a similar price strata. Audi might work too. BMW also has a long partnership with Apple, so I’m surprised that Apple didn’t reach out to them...

Infiniti = Nissan, which isn’t well suited. Not to mention Infiniti is an also ran in the US, which is presumably where the car would first debut.

 

[0924487]

It is not that easy building a huge manufacturing plant with significant output of cars. Ask Tesla. Finding the right workers is also not easy part in many states in the US and foreign countries (except China maybe).

Tesla was having problems until they opened a cluster of factories in Shanghai, now after a few months, they have so much capacity there to a point where they export Chinese Model 3 to Europe now. Tesla R&D now ships the newest features to the Shanghai plant before the US plant. Now they just added Model Y assembly line to Shanghai.

So, yes, I think Apple will open an Apple Car factory cluster in China after the partnership is proven to be viable. I think there is a possibility that Tim can manage to make it 100% Apple-owned, just like Tesla, as opposed to joint venture.

 

[az431]

Hyundai...I mean, it'd be nice if they partnered with a car company that made fun to drive vehicles like Audi or Infiniti.

They are going to end up charging 75k for a friggin Hyundai. No thanks.

First, how about reading the article. Hyundai would be contracted by Apple to build the car for Apple.

Second, Hyundai is rated one of the top manufacturers for quality.

Third, no one has announced any pricing, and even if it was 75k, it would be cheaper than the alternatives on the market.

And finally, this is a rumor.

 

[69Mustang]

Apple and Porsche seem like a natural fit. Both are known for excellent products which are at the top of their respective markets, and both are in a similar price strata. Audi might work too. BMW also has a long partnership with Apple, so I’m surprised that Apple didn’t reach out to them...

Infiniti = Nissan, which isn’t well suited. Not to mention Infiniti is an also ran in the US, which is presumably where the car would first debut.

None of those companies are going to do contract manufacturing for anyone. Their brands are far too strong to risk being considered a Foxconn for cars. Hyundai is hesitant for that exact reason.

 

[mi7chy]

Apple has a long history of abusing their suppliers and throwing them under the bus. Hyundai branding can sell on its own and doesn't need partnering. Have been checking out the Genesis myself.

 

[az431]

Apple and Porsche seem like a natural fit. Both are known for excellent products which are at the top of their respective markets, and both are in a similar price strata. Audi might work too. BMW also has a long partnership with Apple, so I’m surprised that Apple didn’t reach out to them...

Infiniti = Nissan, which isn’t well suited. Not to mention Infiniti is an also ran in the US, which is presumably where the car would first debut.

Volkswagen owns Audi and Porsche, and most of their vehicles share platforms. Given VW's strong electric vehicle portfolio, market share, and future ambitions, it is highly unlikely that it would manufacture electric vehicles for anyone else.

 

[az431]

Apple has a long history of abusing their suppliers and throwing them under the bus. Hyundai branding can sell on its own and doesn't need partnering. Have been checking out the Genesis myself.

But you can't cite one fact to support this alleged "abuse."

Note: rumors and opinions are not facts.

 

[groundedUX]

5-7 years is a VERY long time nowadays.

 

[jlc1978]

Or maybe Hyundai could learn from Apple and take their design and technology and build almost the same vehicle for the half the price when Apple decides to continue on their own? It is also risky for Apple. If there is any form of partnership, Hyundai will end up knowing all about the car, suppliers, designs, materials, engineering, software, etc. In fact, they will know what Apple is planning to do in long term, new designs and developments, etc. This information could cost many many billions.

Right. Like Foxconn, who introduced an iPhone killer after assembling them for years. Apple will ship parts to Hyundai (or whomever else) while retaining all rights, patents, design info for themselves; while learning whatever tech the contract manufacturer has as well as the challenges of using a contract manufacturer for building a car.

Apple and Porsche seem like a natural fit. Both are known for excellent products which are at the top of their respective markets, and both are in a similar price strata. Audi might work too. BMW also has a long partnership with Apple, so I’m surprised that Apple didn’t reach out to them...

Apple would offer Porsche nothing in return for the brand prestige of having Porsche build your cars. Porsche fans are very rabid about Porsches; to the point it took years to even recognize the 914 as a real Porsche and some still don't. Porsche builds (some) Porsches and puts their tech in some VW group products, not make cars under contract for someone else. Even Porsche outsources manufacturing to Valmet; giving it the ability to adjust output without endangering German jobs. They might do contract engineering for Apple, as they do for others, but no way will they start building Apple cars in Stuttgart.

 

[mi7chy]

But you can't cite one fact to support this alleged "abuse."

Note: rumors and opinions are not facts.

But you can't expect others to do the lazy work for you.

Note: Stop being blind and do your own research to see how many suppliers Apple has either sued or thrown under the bus then come back and we'll compare notes.

 

[Infinitewisdom]

Tesla, at least, built their company from the ground up.

This is exactly why Tesla's in a much stronger position. Granted, they had to eat a ton of sh*t to get there, but now that everything's established, it's basically to the moon for the company. Apple is looking for the Foxconn of the car world - does that even exist? Probably not. So they're looking to start something like that in the US. Would be interesting if they could make it happen. Wonder why they don't just partner with an American auto manufacturer. Or maybe it's because Hyundai has all of this excess manufacturing capacity that they want to fill up.

Either way, this is not going to be a Hyundai with an Apple logo. Apple seems to want to partner with them for their manufacturing expertise. But all or most of the parts will be sourced from elsewhere and assembled by Hyundai.

If I'm Hyundai, I'm asking Apple to co-invest in the US plant and everything that's required for the plant to run smoothly, including hiring new folks if necessary. There will probably need to be a completely separate team at Hyundai internally to run this operation.

 

[Infinitewisdom]

Apple would offer Porsche nothing in return for the brand prestige of having Porsche build your cars. Porsche fans are very rabid about Porsches; to the pint it took years to even recognize the 914 as a real Porsche and some still don't. Porsche builds (some) Porsches and puts their tech in some VW group products, not make cars under contract for someone else. Even Porsche outsources manufacturing to Valmet; giving it the ability to adjust output without endangering German jobs. They might do contract engineering for Apple, as they do for others, but no way will they start building Apple cars in Stuttgart.

Exactly. Porsche is a small volume manufacturer who, like you said, outsources some of their manufacturing to others. Neither party really gains anything by partnering. Apple needs a large volume manufacturer for their assembly expertise and factory capacity.

With how important this is, Apple will make it happen. I'm excited to see what an Apple car would look like.

 

[Abstract]

Kia was a contractor for Ford for many years. It’s why their logo is an oval with the same shape and proportions as Ford’s: that makes them interchangeable for different markets. 🤷🏻‍♂️

Now that Kia and Hyundai are successful car companies worldwide, how does going back to being contractors help their brand? 🤔🤔🤔

Hyundai doesn’t benefit brand-wise if the Apple Car doesn’t have an external Hyundai logo on it somewhere visible. Apple won’t agree to.

It’s not even a “partnership” if Hyundai doesn’t gain something from this project other than cash. They need a technological R&D contribution from Apple. Otherwise, it is a contracting gig that actually lowers Hyundai’s brand value.

Plus you no longer have entire control over your own image. Apple Car failures are Hyundai failures. Apple Car bashing is Hyundai bashing, even if some of the choices and decisions weren’t Hyundai’s. 🤯🤯🤯

 

[BeefCake 15]

I hope they go with Mazda instead, a brand that has been pushing amazing innovation for their size.

 

[mannyvel]

Apple has a long history of abusing their suppliers and throwing them under the bus. Hyundai branding can sell on its own and doesn't need partnering. Have been checking out the Genesis myself.

Using the word "abuse" for a business arrangement is an overreaction. If a supplier doesn't like the arrangement they are free to break their contract and leave. If they're dumb enough to sign a contract that they can't deliver on then they get what they deserve (like GT Advanced Tech).

A business arrangement is exactly that. Apple needs to deliver, and if you can't deliver then you're gone. Do you expect Apple to take a hit because your mom got sick and can't run the factory today? Or that you did your math wrong and you're actually losing money?

Get real. Apple is a tier 1. You can't play games like that with a tier 1 partner and get away with it. If you don't like it go back down to small business contracting, where they have no leverage and you can screw them over at will.

 

[Joe The Dragon]

I hope Hyundai and Apple can reach an agreement. Please don’t price this car out of reach of all but the rich.

if Apple goes with a luxury brand, I can’t see this succeeding

As long as they don't make it DEALER ONLY REPAIR and service

 

[alfonsog]

A base Tesla Model 3 is 38k and that will be hard to compete against. If Apple goes upscale they need to be better than the brand new re-designed Tesla S which is 80k with 412 miles of range. A Kia Niro EV is 39k; VW ID.4 is 40k.

 

[jcshas]

This sounds reminiscent of the negotiations that took place with mobile carriers prior to the iPhone launch.

 

[nicemod]

It’s money on the table. If Hyundai doesn’t want to come to terms, Apple will find another company to do it. In countries outside the US, this is likely to happen. A car manufacturer should not feel so proud to walk away.

Or, given the mcap of Hyundai, Apple could just buy them outright with cash reserves. I don't know if they would, because they probably don't want the manufacturing, service and warranty overhead of a company like that, but there are lots of small/smaller manufacturers with an existing dealer network that would be easy to snap up. Subaru, for example (though their R&D capacity is tiny). Nissan is already working on their third-generation battery tech from the Leaf.

When Fiat came back to North America a decade ago it was on the back of a hollowed-out, bankrupt Chrysler. Did they want Chrysler build quality? Absolutely not. Did they want access to an existing, nationwide parts and maintenance infrastructure—you bet.

Given Apple is a premium brand and product I do not know if Hyundai is the right partner. Nothing wrong with their cars, but that is not a brand anyone associates with premium. If it goes like some partnerships Hyundai will be left holding the bag after Apple figures out what they need to know.

My guess is that nobody will know (or care) that it's a Hyundai under the skin except us and car people. That'll be Apple's terms.

 

[nicemod]

Magna doesn't have the capacity and scale. As you noted, they are already doing the Z4, Supra, G-Class, the I-Pace and the E-Pace. Their new Chinese factory is dedicated to Chinese vehicles. Most importantly, Magna doesn't have a facility in the US and that seems to be a priority for Apple. It's rumored Magna looking to expand to N. America, but that rumor has persisted off and on for years. It doesn't seem logical that Apple would wait until Magna got that sorted when Hyundai/Kia has the infrastructure in place now.

Of their 70,000 staff, Magna has 48 facilities and 19,625 employees in Canada. 31 facilities and 27,100 employees in Mexico. I'm not sure how much of that is strictly vehicle assembly, but they're one of my first thoughts when it comes to contract. Plus, USMCA/CUSMA née NAFTA.

 

[CHSE]

If I picture an Apple car it would be a Tesla with apple carOS. Why not just do this- an Apple edition Tesla? Teslas system could really benefit form apple- the voice is terrible and the system ergonomics are just OK. ... and there finally would be iPhone integration.

 

[69Mustang]

Of their 70,000 staff, Magna has 48 facilities and 19,625 employees in Canada. 31 facilities and 27,100 employees in Mexico. I'm not sure how much of that is strictly vehicle assembly, but they're one of my first thoughts when it comes to contract. Plus, USMCA/CUSMA née NAFTA.

Afaik, Magna has two automotive manufacturing plants. Their main plant in Austria, another new one in China. They also have a powertrain plant in Slovakia. They have no automotive manufacturing in N. America and the US specifically. Magna also specializes in small batch manufacturing, hence my comment about their capacity and scale. That's not to say they won't have that in the future. But that will require significant investments of time and capital.

 

[jlc1978]

This is exactly why Tesla's in a much stronger position. Granted, they had to eat a ton of sh*t to get there, but now that everything's established, it's basically to the moon for the company.

Tesla's not in that strong of a long term position, they have yet to make a profit as a pure car manufacturer, the quarters they have made a profit is because they can sell credits to other manufacturers that are used to meet regulatory zero emissions requirements. Once the major manufacturers build enough EVs to not need the credits, they will start having to make money off of their cars. At that point some of the luster will fade from Tesla's stock; it's not that they can't make it, it's they face a steep challenge in the future.

If I'm Hyundai, I'm asking Apple to co-invest in the US plant and everything that's required for the plant to run smoothly, including hiring new folks if necessary. There will probably need to be a completely separate team at Hyundai internally to run this operation.

If I'm Hyundai, I'm asking Apple to cover the entire costs for a new factory, so if they bail on me I'm not out a huge capital investment.

Exactly. Porsche is a small volume manufacturer who, like you said, outsources some of their manufacturing to others. Neither party really gains anything by partnering. Apple needs a large volume manufacturer for their assembly expertise and factory capacity.

With how important this is, Apple will make it happen. I'm excited to see what an Apple car would look like.

No doubt Apple can do it if they want, they have the cash. The question is how much money are they willing to pour into building a car? I'm guessing they are going to shoot for the prestige (read expensive) end of the market because that's where a low volume vehicle can make money, way before they try to create a mass market car.

 

[nicemod]

Afaik, Magna has two automotive manufacturing plants. Their main plant in Austria, another new one in China. They also have a powertrain plant in Slovakia. They have no automotive manufacturing in N. America and the US specifically. Magna also specializes in small batch manufacturing, hence my comment about their capacity and scale. That's not to say they won't have that in the future. But that will require significant investments of time and capital.

Gotcha. Thanks for the clarification.

Magna has, on and off over the years, made the news here in Canada a lot—primarily due to cross-border trade on auto manufacturing (and occasional layoffs).

 

[truthertech]

"Apple is the boss. They do their marketing, they do their products, they do their brand. Hyundai is also the boss. That does not really work,"

Indeed and whilst Apple is good at what they do on their own, they are not a good partner to work with on something this complex and lack any experience in.

It’s arguably less complex than building the iPhone. There’s nothing that unique among the hundred car manufacturers, other than the design, which Apple is great at, and because of aerodynamics is also becoming somewhat homogeneous, and the software for self-driving, which Apple has been working on for several years and has a test fleet driving every day already.

The reason there are so many electric startups is that there are so few parts in an electric vehicle and they can pretty much just be ordered “off the shelf” like Tesla did, including the battery’s.

Apple is an expert at working with contract manufacturers to assemble parts in their design with their technology. The only question is whether it makes economic sense for them to do so.