Hyundai, Kia say Apple car deal now off, see $8.5 billion drop in shares

Hyundai Motor said on Monday it is not currently in talks with Apple Inc on autonomous electric cars, just a month after it confirmed early-stage talks with the tech giant, sending the automaker’s shares declining.

Wiping $3 billion off its market value, the automaker’s stock dropped 6.2%. Shares in its affiliate Kia, which had been tipped in local media reports as the likely operational partner for Apple, dropped 15% – a $5.5 billion hit.

The announcement has provided new revelation on weeks of internal divisions at Hyundai Motor – parent to both automakers – about the potential tie-up, with some executives raising concerns about becoming a contract manufacturer for the U.S. tech giant in a tie-up reminiscent of electronics firm Foxconn’s role in creating device for Apple like the iPhone.

“We are receiving requests for cooperation in the joint development of autonomous electric vehicles from various companies, but they are at an early stage and nothing has been decided,” the automakers said on Monday, in compliance with stock market rules requiring regular updates to investors about the market rumours.

“We are not having talks with Apple on developing autonomous vehicles.”

Kia shares had jumped 61% since Hyundai confirmed a local media report early in January that Apple and Hyundai were in discussions to develop self-driving electric vehicles by 2027 and develop batteries at U.S. plants operated by either Hyundai or Kia.

“Apple and Hyundai are in discussion, but as it is at an early stage, nothing has been decided,” Hyundai said, before releasing subsequent statements that removed all mentions of Apple but said Hyundai was getting electric vehicle cooperation requests from parties it didn’t identify.