The Korea-based automaker on Friday backed away from a statement confirming it was in preliminary talks with Apple on developing a self-driving car, quickly shifting gears to say it has received requests from a number of technology suitors.
The initial statement sent shares of Hyundai soaring 19%, though the company walked back that announcement within hours, removing all references to Apple and saying instead in a revised release that it has been contacted by multiple potential partners for the development of autonomous electric vehicles.
Hyundai’s apparent slip of the proverbial tongue caused a big stir in a relative short period, not only because of how investors reacted to the initial news but because of Apple’s notoriously tight-lipped approach to announcements and partnerships – leaks of which have drawn severe rebuke from the Cupertino, Calif.-based company.
To be sure, well-known Apple watcher Dan Ives with Wedbush Securities was quick to note that even if the talks with Hyundai come to fruition Apple still may reach deals with other automobile makers, possibly even with Tesla (TSLA) – Get Report.
“We believe based on our investor conversations over the last few weeks that many on the Street would rather see Apple partner on the EV path, than start building its own vehicles/factories given the margin and financial model implications down the road, coupled with the strategic product risk around such a gargantuan endeavor,” Ives said.
“This speaks to our view that the chances of a strategic partnerships with the likes of a Tesla, VW, Hyundai or other auto manufacturers in China (e.g., Nio (NIO) – Get Report, Xpeng (XPEV) – Get Report) are in the 70%+ range over the next few years and could lay the groundwork for a dual path (start building its own line of EV autos post 2025) over the next decade if this EV/autonomous venture is successful with consumers,” he added.
Ives reiterated his outperform and $160 price target on Apple, which ended Thursday at $130.92.
Shares of Apple were up 0.84% at $132.02 in premarket trading on Friday. The stock has gained nearly 70% over the past 12 months.
Apple has long taken a secretive approach to developing and launching new products and services. In 2018, the company warned workers to stop leaking internal information on future plans and raised the specter of potential legal action and criminal charges, saying in an internal memo it had “caught 29 leakers” in the previous year.
Reports last month indicated Apple was focusing on a new auto design that could “radically” reduce the cost of batteries and increase an electric vehicle’s range. To date, the company has not commented.