Hyundai is traditionally known for its reluctance to work with outsiders, making engines, transmissions and even its own steel in-house in a vertically integrated supply chain as South Korea’s second-largest conglomerate.
Although shares in Kia and Hyundai had surged on news of the talks, internal opposition to becoming an Apple contract manufacturer was considerable, according to people familiar with the matter.
“We are agonizing over how to do it, whether it is good to do it or not,” a Hyundai executive aware of internal discussions on the tie-up told Reuters in January. “We are not a company which manufactures cars for others,” he said, speaking on condition of anonymity.
Apple and Hyundai first started talks over a car partnership in 2018, another person familiar with the matter previously told Reuters. But progress was hampered by the South Korean automaker’s reticence on working with outsiders, the person said.
Reuters reported in December that Apple was moving forward with autonomous car technology and aimed to produce a passenger vehicle that could include its own breakthrough battery technology as early as 2024.
Apple, known to keep product plans under tight wraps, has never acknowledged talks with the automaker about building vehicles, and was not immediately available for comment outside business hours in the United States.
Analysts said talks might have collapsed over leaks of the partnership plan to media, or over possible insistence by Apple that Hyundai’s role in any tie-up would be that of an equipment manufacturer, rather than a strategic partner.
“With numerous news reports over discussions between the two companies, which should have been held to non-disclosure agreements, it would have been uncomfortable” said Kwon Soon-woo, an analyst at SK Securities.
Kevin Yoo, an analyst at eBEST Investment & Securities, said: “It seems clear that Hyundai Motor Group has not been too happy with dealing with Apple … They made it clear that they do not want to be treated just as Apple’s supplier or manufacturer.”