In an instance of positive hype resulting in a major let down, the two major automotive companies, namely Hyundai and Kia announced on Monday that they were not in talks with Apple for the company's Smart car, sending their shares tumbling. As part of separate regulatory filings by the two automotive brands, the companies announced that they were not having talks with Apple in relation to developing autonomous vehicles.
What Did the Reports Suggest?
This comes days after reports suggested that Apple was in talks to invest KRW 4 trillion ($3.6 billion) into Kia, with a contract likely being signed later in February, most likely on February 17 after initial reports suggested talks between the companies back in January.
The report further stated that Kia would handle the Apple Car project with Apple aiming to set up an exclusive production unit in Georgia, within Kia's facility. The report also mentioned that Apple had set a target of 2024 to debut its electric vehicle, with an aim to produce 100,000 units of its electric car per year.
For those of you wondering, in early January, shares of both companies surged after Hyundai had stated that Apple and Hyundai were in between discussing some topics, with the conversation being at an early stage. Overall share surges were reported at 20% for Hyundai and 40% for its subsidiary Kia.
What are the Impacts of this Announcement?
With the announcement being made, the shares of both Kia and Hyundai slumped to 14% and 6% respectively. Both of these companies announced that they were not in talks with Apple on the same day, releasing statements around the same time.
However, Hyundai did say that it was getting requests for cooperation on joint development of autonomous electric vehicles from various companies, without naming any of these corporations.
What played a key part in this slump was all the hype surrounding this situation, especially when one considers that Apple had never acknowledged talks with either automaker, with no comments being made in relation to these announcements.
All of this was due to a Reuters report back in December, which stated that Apple was moving towards the future with autonomous car tech aimed at providing a passenger vehicle with its own battery tech as early as 2024.