South Korea’s Hyundai is reportedly in early talks to develop a self-driving electric Apple car, which could upend the auto sector. Apple (AAPL) stock rose.
The Korea Economic Daily reported that the iPhone maker proposed a partnership with Hyundai Motor and that the auto giant even reviewed terms. The report added that the proposed partnership would include production of electric vehicles and batteries, with a car potentially on sale by 2027.
“We understand that Apple is in discussion with a variety of global automakers, including Hyundai Motor,” a Hyundai spokersperson told CNBC Thursday. But the company described talks as at an early stage and later dialed back its earlier statement to leave out mention of Apple, which has a reputation for secrecy.
In a note Thursday, Wedbush analyst Dan Ives put the odds of an Apple car unveiling by 2024 at “35%-40%,” given challenges on manufacturing, batteries and regulations. But he strongly believes Apple will announce an EV partnership in 2021, with Hyundai potentially the first and more to follow.
“The EV market is what could ultimately be a trillion dollar opportunity globally over the next decade and it’s a smart strategic move for Apple to dive into the deep end of the pool,” he said. Ives has an outperform rating and 160 price target on Apple stock. But, he warned, many Apple products and ideas never make it out of the lab stage.
Apple’s self-driving car effort, Project Titan, made headlines a few years ago. Reports then died down until Reuters reported a potential Apple car slated for 2024.
Apple Car News Leaves EV Stocks Mixed
Apple stock rose 0.9% to close at 132.05 in Friday’s stock market trading. It’s extended from an alternate 125.49 entry but has formed a handle with a 138.89 buy point. Tesla popped 7.8% and is far extended from a 466 buy point.
The advent of an Apple car could result in a complete shake-up of the global auto industry.
It would be “one of the biggest moments in the autos and shared mobility industry in 2020 … with the potential to be a transformative event for the industry over the decades to come,” Morgan Stanley analyst Adam Jonas wrote in a note last month.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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