February 5, 2021
It’s an awkward social fact that the prettiest girl at a dance gets to choose whomever she wishes as her partner. So why would Apple, arguably one of the richest and most successful companies in the world, choose Korean carmaker Hyundai as its partner in a new electric vehicle (EV) venture?
The news first appeared in a Reuters story out of Korea in early January. The reports originated with Hyundai and the notoriously close-lipped Apple would not provide any information to the Reuters reporters. Weeks earlier, the news outlet had reported that Apple was planning on producing an EV with its own battery technology by 2024.
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An Apple self-driving autonomous electric vehicle was reported as early as 2014. Code-named Project “Titan” the effort got a boost in 2015-2016 as the company went on a hiring spree, bringing in engineers with automotive experience and applying for autonomous vehicle permits from the State of California. In early 2019, however, it all came crashing down as Apple reportedly laid off 190 employees from its Titan project—the idea of an Apple car seemed to have been pushed to the back shelf.
For those who are not familiar with building vehicles in the auto industry, it’s hard. For example, it has taken a solid ten years of toil and strife for EV-darling Tesla to become a success story, and it has largely played in an arena with little or no competition. Legacy manufacturers building gasoline-powered cars and cross-over sport utility vehicles operate at low profit margins and are legally tied to dealership franchises that also need their cut of the pie. Not everyone survives—Plymouth, Pontiac, Oldsmobile, and Saab, for example.
Meanwhile, the industry is going through a near cataclysmic upheaval as EVs are coming. China has already made the switch, but its car buyers didn’t come from a culture that revered internal combustion. Europe is moving forward with its electrification and its auto industry has finally accepted the inevitable. US manufacturers are also coming around, but with EVs only making less than 2% of the US market, the fear is that new EVs will clog dealerships and US buyers continue to buy behemoth pickup trucks and SUVs.
It is easy to assume that a high technology and high-end consumer electronics firm would be well-placed to create the power electronics, control circuitry, electric drivetrain of an EV. But the technology involved in a cellphone or iPad is equivalent to that of the EV’s audio system. Building the rest of the electrical systems required is more akin to building a military aircraft. The strength of companies like Tesla is that it is integrating everything, from the audio system to the door locks into one incredibly complex system that operates seamlessly together—there is no separate audio system.
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Beyond EV propulsion and the development of battery systems that are powerful, safe, recharge quickly, and last the life of a vehicle, the need for autonomous operation has become an even more difficult challenge. Before it canceled its Project Titan, Apple had been quietly working on vehicle autonomy for several years, but the challenges go beyond sensor systems and artificial intelligence and include developing intricate mapping systems that the vehicle can use as it navigates in real-time. The costs and challenges involved in developing vehicle autonomy are not for the faint of heart.
Confusion Brings Opportunity
Why would Apple think that it is the perfect time to jump into this maelstrom? Confusion brings opportunity. When it comes to building autonomous EVs, the legacy automakers are all starting roughly on the same boat—a vessel that Apple might feel would not be too difficult to climb aboard. Becoming a part of the transportation industry will certainly be easier for Apple now than it will be if it waits. As the world’s most valuable brand, Apple also currently has the necessary wherewithal to do practically anything it wants to.
Data is the Key
There is another reason why Apple would want to be a part of the auto industry. Data. It has been said that modern life provides us with four screens—points where we share our data to a world of retailers and marketing entities. We have smart TVs at home, where through a variety of streaming services we express our entertainment preferences. We carry smartphones on our persons, 24/7, providing data on our location, our travel, and our purchases. Most of us have a computer screen at work that doubles as an entertainment option and research tool through our web browsing.
The final frontier to harvest data is our vehicles. Particularly as cars become autonomous, access to entertainment, shopping, and travel becomes increasingly attractive. It’s the fourth place that our data can be harvested. Apple is strongly involved in three of the four, is there any wonder why the data monger would be interested in part of our transportation experience?
If Apple has aspirations as an automaker why Hyundai? At first blush, it would seem that the premium nature of the Apple brand would lend itself more to a Lexus, Mercedes-Benz, or BMW partnership. Hyundai is a solid brand with worldwide production capability and a growing portfolio of EVs. It has good connections in the vital China market and has moved out of the second-rank to be considered a first-rank competitor with the likes of Honda and Toyota.
But a report out of Korea (eDaily translated by Google) suggests that Hyundai would rather push the Apple project to its Kia subsidiary, and potentially build Apple-branded vehicles in its US plant in Georgia. It seems, that the Apple name is so strong that it would overshadow the Hyundai nameplate that the company has spent so long polishing. It would be an Apple car and the Hyundai contribution, and no matter how important its EV, battery experience, and vehicle dynamic expertise would be to the project, Apple would get all of the credit. Moving the project to the less prestigious Kia Motors brand probably seems a safer bet. It sort of explains the reluctance of a Mercedes-Benz or BMW to work with the iPhone maker.
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Then there is the battery question. Soonho Anh, a senior vice president at Korean battery maker Samsung SDI, joined Apple at the end of 2019. Samsung is a major supplier of batteries to Hyundai’s EV programs. Samsung has also been a supplier to Apple for many of its electronic devices. There have been rumors that Apple’s new EV will be powered by a “monocell” lithium-ion battery technology that packs more active electrochemical material into a smaller space allowing for greater EV range. Of all of the excitement generated about a potential Apple EV, the rumors that the company has developed a new kind of superior EV battery seem the least likely.
Since the early reports of an Apple EV and a Hyundai connection, speculation has been rife, but actual information from either company has been scarce. After seeming to confirm the initial report, Hyundai quickly retracted its original admission that it was in talks with Apple, saying only that it was receiving requests from various companies regarding the development of autonomous EVs.
Can we expect an autonomous Apple EV on the US market in 2024? It took just 12 months for Tesla to build its Gigafactory in China and start building cars, so with enough money, almost anything is possible. Apple probably has enough money, but will it decide it wants its formidable name front and center, or will it be content to simply supply its expertise to an industry in which it has no direct manufacturing experience? Industry experts we spoke with seem to put the odds at slightly better than 50-50 that an Apple nameplate EV will become a reality, slim odds for a company that is used to getting its way.
Kevin Clemens is an engineering consultant who has worked on automotive and environmental projects for more than 40 years.
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