Korea IT News: Beta version of an Apple Car next year, 100,000 by 2024

A second version of the report cut most of the important details.

From Reuters’ “Apple, Hyundai set to agree electric car tie-up, says Korea IT News” posted Sunday morning:

Hyundai Motor and Apple Inc plan to sign a partnership deal on autonomous electric cars by March and start production around 2024 in the United States, local newspaper Korea IT News reported on Sunday…

An updated version of the IT news report removed details, including production location and capacity and the timeframe for signing the agreement and launching the pilot vehicles.

The previous version said the companies planned to build the cars at Kia Motors’ factory in Georgia, or invest jointly in a new factory in the United States to produce 100,000 vehicles around 2024. The full annual capacity of the proposed plant would be 400,000 vehicles. Kia Motors is an affiliate of Hyundai Motor.

The report also said Hyundai and Apple planned to release a “beta version” of the Apple cars next year.

My take: An unusual level of push-back on this story.

17 Comments

  1. Romeo A Esparrago Jr said:
    Repeating myself :

    Better throw some water on Hyundai.
    Literally.

    “ DETROIT (AP) — Hyundai is adding about 471,000 SUVs to a September U.S. recall for an electrical short in a computer that could cause fires. And the company is warning owners to park the SUVs outdoors until they are repaired. “

    And that sounds like a spontaneously combusting computer in there, certainly not Apple’s.

    2
    January 10, 2021
  2. Steven Philips said:
    I don’t think singular adverse events define the situation either way.
    Every company has them.

    1
    January 10, 2021
  3. Jerry Doyle said:
    I do not believe there is a car company that has escaped a large vehicle recall. If there is one, please let us know for that would be news. Hyundai produces quality vehicles. Their luxury division is the Genesis, and that car is unrivaled in its competitive quality vs price relative to other cars in the luxury division. The Genesis G90 fast is becoming competitive with the Mercedes S Class, the BMW 7 Series, the Audi 8 Series, the Lexus LS 500 Series with a price on average about $20,000 less than the others while offering similar amenities. Give Hyundai another 5-10 years and they may be right in the thick of the top end luxury segments. Automobile magazines rate their quality build, performance and handling highly.

    Continue…

    1
    January 10, 2021
  4. Jerry Doyle said:
    Continued…

    Having said the above, I am beginning to question if Hyundai is still in the running after all these leaks. Apple would be better to avoid the legacy car makers and use its vast resources and technology to manufacture its own cars. Apple already has poached dozens of Tesla key engineers so make the others offers they can’t refuse.

    I haven’t read or heard of anything Jony Ive is deeply involved in since he left Apple. I am beginning to believe that Jony, who is a car aficionado design enthusiast, may be the designer working on the new Apple car. Talking about driving Apple’s multiple upwards in the vein of Tesla’s multiple then throw in some tangy, spicy, saucy info as this possibility. Jony Ive (who can keep secrets and not leak like Hyundai) is the Apple car’s chief designer and Apple will establish its own manufacturing plant for the new Apple iCar. Lordy, Lordy, … if that news broke then Apple’s multiple would climb to 1,682, the same as Tesla. 🙂

    3
    January 10, 2021
    • Horace Dediu said:
      400,000 cars at $45,000 average selling price would increase Apple’s revenues by about 6% but would dilute margins and perhaps reduce net profitability. There is some brain disease going around about cars (evident by Tesla’s valuation) but cars have not been an interesting business for about 35 years and making them electric does not change that.

      Selling 4 million cars/yr would be a bit more interesting but then you’re getting into top 5 producer levels which takes decades. Hyundai Kia group are at 7.2 million and it took decades to get there. Having said that, if entering this low margin, limited quantity market increases P/E multiple from 40 to 1600 then I’m all for it.

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      January 10, 2021
      • Jerry Doyle said:
        @Horace Dediu: The Apple car may be viewed as the entry level revenue source for creating and for generating additional new revenue streams. With all its secured driving data Apple will know definitively the safety of its vehicles on the road to the extent that Apple can include for perspective consumers “one-stop” shopping of purchasing a new Apple car, adding Apple Care Protection, Apple auto insurance and then financing it all through Apple Pay Finance. Apple can simplify this process making it so inviting with a few on-line clicks similar to purchasing a Tesla.

        The thought of going to a dealership, meeting with a salesperson, walking through the labyrinth groupings of convoluted amenities from which to add driving upwards the vehicle purchase, and then searching for financing and making a call to your insurance agent who keeps raising rates every six months even though one hasn’t had an accident in decades, seems inviting. We now are talking about revenues streams from the sale of vehicles, Apple Care Protection, Apple vehicle insurance and Apple financing. Suddenly, it’s much more than just revenue from the sale of a car.

        3
        January 10, 2021
        • David Emery said:
          The auto sales experience is definitely ready for disruption. GM was really onto something with Saturn and its no-hassle approach. Tesla has further disrupted things. We’ll see if Apple can come up with a much better way to sell cars.

          1
          January 10, 2021
      • Gregg Thurman said:
        Up voted. Thank you Horace.

        1
        January 10, 2021
    • Robert Paul Leitao said:
      Jerry: I suggest checking your math. Apple’s market cap (about $2.222 trillion) is already roughly equal to the total market cap combined of all publicly-traded auto makers in the world, inclusive of Tesla. At nearly $835 billion, Tesla’s market cap is already almost 4x the market cap of Toyota, the auto maker with the second largest market cap at about $214 billion. Tesla’s market cap is about 15x the market cap of BMW and 17x the market cap of Honda. At Tesla’s multiple, Apple would be trading at about $93 trillion dollars. That’s more than 4.5x the GDP of the United States. Sorry, it’s not going to happen.

      3
      January 10, 2021
      • Jerry Doyle said:
        @Robert Paul Leitao: “…. At Tesla’s multiple, Apple would be trading at about $93 trillion dollars. That’s more than 4.5x the GDP of the United States. Sorry, it’s not going to happen.”

        My good man, I only can assume you failed to see the bright shiny yellow smiley at the end of my post on the P/E scenario. Try not to get too far down in the weeds to where you fail to grasp a little levity from above. 🙂

        1
        January 10, 2021
        • Robert Paul Leitao said:
          Jerry: That was my mistake. Your humor is so far above anything earthly, I couldn’t grasp it. I thought the smiley face meant Apple would be at a market cap that finally jived with your out-of-this-world revenue and earnings growth expectations. Alas, I’m just a mere mortal being.

          0
          January 10, 2021
          • Jerry Doyle said:
            @Robert Paul Leitao: “… with your out-of-this-world revenue and earnings growth expectations.”

            Right about your comment above Paul as I assumed erroneously one would see quickly the improbability of my expectations, as you did, and realize the jocularity along with the absurdity. I know this, though, my good man; if I hear of a need for someone possessing refined individuality of work ethos quick at running and crunching numbers in the quest of finding best solutions you will be at the top of my recommendation list. 🙂

            PS: PED needs to provide us more variety in our selection of emoticons. Is that possible PED? You have doubled our subscription rates, you know. 🙂

            0
            January 10, 2021
  5. Bart Yee said:
    Apple, like Porsche in the late 90’s, will not create a new product unless it will make a profit – either from the get go, or relatively quickly. Neither one will make loss leaders or commit resources unless they believe the market is ready and the product is ready. Current example is foldables – Apple “could” introduce a foldable tomorrow and be what? Pretty much the same as the few that are out there, using similar costly materials, and trying to take part of a <2-3M unit market?? Waste of time for very little return. Apple continues to develop w/Corning bendable glass and superior hinge technology. I suspect they also are waiting for battery upgrades to extend mobile use overall. Apple will want differentiating tech and the market to be ready for an Apple Foldable if it ever exists.

    Same with AppleCar ™ / AppleAuto ™ – the product must be ready, as fully tested and proven as much as possible, and production methods and costs must also make sense. IMO, Apple and its manufacturing partner may create a new jointly owned firm to make the vehicle. Apple would be diluted with Hyundai while Hyundai would be elevated by Apple. But perhaps Hyundai wants to compete more fully with Samsung chaebol?

    1
    January 10, 2021
  6. bas flik said:
    i think apple can make more money with apple watch focus on health then with cars. focus on health and apple ends up with 1 billion people wearing a apple watch. cars are not scalable. terrible transportation. maintenance. horrible exercition compare to watches.
    short term multiple increase is nice though.

    4
    January 10, 2021

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