Apple has been secretive about its electric-vehicle ambitions.(Photo by Mladen Antonov/AFP via Getty Images)
Agence France-Presse/Getty Images
Apple’s search for an auto maker to join the tech giant’s project to build autonomous vehicles continues, following reports that discussions have dissolved with Nissan.
Shares in the Japanese auto giant tumbled near 3% in Tokyo trading. Apple shares were not traded in the U.S. on Monday due to the Presidents Day holiday.
The back story. There has been speculation over Apple’s vehicle ambitions since 2015, when The Wall Street Journal reported that it was gearing up to take on Tesla. The iPhone maker has been highly secretive about its plans for “Project Titan,” confirmed in 2016, which has evolved to encompass self-driving, or autonomous, electric vehicles.
Analysts have suspected that the Silicon Valley giant would partner with an existing auto maker to break into the capital-intensive vehicle industry.
On Feb. 8, Korean auto makers Hyundai and Kia said they were no longer in talks with Apple over an autonomous electric-vehicle project, following widespread press and analyst speculation that a deal was near. That news had sent Hyundai stock down more than 6% and shares in Kia down 15%—eliminating a combined $8.5 billion in market value from the two companies.
The next day, Nissan’s chief executive Makoto Uchida was pressed in an earrings call on whether the company had been approached by Apple about a collaboration. Uchida avoided addressing Apple directly, but indicated that Nissan could partner with technology companies on building the next generation of cars.
What’s new. Nissan confirmed on Monday that it was not in talks with Apple, but said it was open to exploring collaborations and partnerships to accelerate the vehicle industry.
The Financial Times had reported earlier that there were discussions between the two groups over a partnership, but that talks had stalled over possible branding. According to the report, the discussions did not reach senior management levels.
A source close to Nissan told Agence France-Presse that “when you make a product under the Apple brand, you give your soul— and your profit margins— to Apple,” and that Nissan was “not interested in giving Apple the best that we offer.”
Plus:Apple iCar Is a Terrible Idea. Here’s Why.
Looking ahead. It makes sense that Apple would partner with a strong auto maker to realize its electric-vehicle dreams. With Nissan crossed off, following Hyundai and Kia, that list is narrowing.
On Feb. 7, just before Hyundai and Kia confirmed they were not involved with Apple, veteran technology analyst Daniel Ives of investment firm Wedbush, said it was a matter of “when not if” Apple entered the electric-vehicle race. Ives put the chances at 85% that the tech giant would announce a relevant partnership or collaboration within the next three to six months.
Ives singled out Hyundai as the most likely choice, with Volkswagen Group —which also makes Audi and Porsche —as the next best bet. With Hyundai out, investors should keep an eye on the German giant. The analyst also floated Tesla and Ford as possible candidates.
Barron’s has contacted Apple and Nissan for comment.
