Why did “Apple” choose this company to manufacture its electric car?

Apple is set to strike a deal with South Korean company Hyundai-Kia to manufacture an autonomous electric vehicle bearing the Apple brand at Kia’s assembly plant in West Point, Georgia.

The car, dubbed “Apple Car,” which is in development by an Apple team, is expected to go into production in 2024, according to sources who spoke to “CNBC,” who said its final offering could be postponed. From what has been seen by “Al Arabiya.net”.

The sources added that no deal had been reached between the two companies. Additionally, they confirmed that Apple may eventually decide to partner with another automaker separately or in addition to working with Hyundai.

“Hyundai will not be the only automaker that Apple will cooperate with,” said one of the sources familiar with Apple’s strategy to develop an electric car.

Gains and concessions

Each company sees a unique advantage in working with the other to develop an Apple car, the sources say. For Apple, the decision to build a car unlocks the potential to tap into the $ 10 trillion auto market and global mobility.

Morgan Stanley analyst Katie Huberty described Apple’s expected profit potential by entering the auto market.

She pointed out that the smart phone market is $ 500 billion per year, Apple owns about a third of this market, while the size of the mobility market is $ 10 trillion per year. Apple will therefore only need a 2% share of this market to have the size of its iPhone business.

Apple’s interest in working with Hyundai is due to Apple’s desire to build a Sierra in North America with an established automaker ready to allow the tech giant to control the software and hardware that will go into the car. .

In other words, it will be an “Apple car”, not a Kia model that shows Apple software.

For Hyundai, business with Apple was led by the company’s new president, Osun Chung, who took over the management of the Korean automaker last October.

Hyundai executives believe their work with Apple will accelerate the development of their own electric vehicle plans, as Hyundai is currently partnering with Aptiv in a joint venture to develop autonomous vehicle technology, including robotaxis.

Different cars

“The first Apple cars are designed without a driver,” said one of the sources familiar with the current plan, which could mean that its first commercial uses will focus on delivery services and robotic businesses.