Hyundai-Kia Say Apple Talks On EV Tie-Up Are Off The Table

Hyundai Motors and Kia Motors announced that they are not in discussions to partner with Apple Inc. for the development of autonomous vehicles.

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Hyundai and Kia put out the statement following media reports over the weekend that the preliminary talks with Apple (AAPL), which had been initially confirmed in January, had been paused.

“We are not conducting consultations with Apple on the development of autonomous vehicles,” according to a translated regulatory statement filed by Hyundai and Kia.

The South Korean automakers added though that they have received cooperation requests for the joint development of self-driving electric vehicles from a number of companies, but that talks were at an initial stage and no decision had been taken yet.

The update comes after CNBC reported last week that Apple was close to finalizing a deal with Hyundai-Kia to produce a self-driving electric Apple Car beginning in 2024.

Apple is reportedly seeking to build a vehicle for consumers and has a goal of building a personal vehicle for the mass market in contrast to rivals such as Alphabet Inc’s Waymo, which has built robo-taxis to carry passengers for a driverless ride-hailing service.

The iPhone maker’s shares have ballooned 70% over the past year as the coronavirus pandemic has created opportunities for companies like Apple who are weathering the crisis relatively well and are looking to increase their reach and boost market share. (See Apple stock analysis on TipRanks)

Wedbush analyst Daniel Ives, who has a Buy rating on the stock with a $175 price target, argues that now the question is “when not if” Apple will enter the EV race over the next few years.

“While the timing of an EV partnership with the likes of Hyundai, or another automaker, remains a key focus of the Street and EV industry over the coming months we assign a 85%+ chance that Apple will announce an EV partnership/collaboration over the next 3 to 6 months,” Ives wrote in a note to investors. “With US auto stalwarts GM and Ford announcing very aggressive EV endeavors over the past few weeks and a Biden-driven green tidal wave on the horizon, we believe now is the time for Apple to dive into the deep end of the pool on the EV front.”

“Apple with the right partner (Hyundai and VW Top 2 choices) would be a major force in the EV industry and could disrupt market share from the likes of Tesla, GM, Ford if the company is able to get the Apple Car on the road by 2024,” the analyst summed up.

Currently, the rest of the Street has a cautiously optimistic outlook on the stock. The Moderate Buy consensus rating is based on 20 Buys, 5 Holds and 2 Sells. Meanwhile, the average analyst price target of $149.92 indicates upside potential of 9.6% to current levels.