Kia Corp. 000270 3.47% has approached potential partners about a plan to assemble Apple Inc.’s AAPL -0.31% long-awaited electric car in Georgia, according to people familiar with the matter. The proposal would involve a multibillion-dollar investment, according to people familiar with the matter, who stress that a deal hasn’t been completed. If successful, it would thrust the iPhone maker into the car business after several years of secretive work in which its engineers plotted to upend the 100-plus-year-old automotive industry.
The likelihood of a final agreement was thrown into question when Kia’s parent company, Hyundai Motor Group, said last month, then sought to play down, that it was in negotiations with Apple to cooperate on an electric driverless car. Apple has never confirmed those talks, and its dalliances with other auto makers in the past have fizzled. Hyundai has talked to Apple about investing more than $3 billion in a deal that would see its subsidiary Kia begin building cars under the tech company’s brand as soon as 2024, a person familiar with the matter said. Under such an agreement, up to 100,000 vehicles could be assembled in the first year in Georgia, where Kia has a factory, the person said. South Korean newspaper Dong-A Ilbo earlier reported the potential deal’s scope.
As reports of a deal have filled the Korean media, Hyundai and Kia shares have soared. Recently, Hyundai-Kia officials have been reaching out to potential partners in preparation for a deal going through. “We are hearing encouraging things,” said a person briefed on the matter in Georgia.
Hyundai-Kia isn’t the only entity in the automotive industry to talk with Apple about its latest ambitions. Late last year, Apple began reaching out to suppliers about potentially putting a vehicle into production.
The revelation late last year that Apple was talking to suppliers came after several years of fits and starts for the car program, dubbed Project Titan. Apple first considered doing a car, then scaled back to work on driverless-car technology. It now seems to be thinking again about a vehicle.
If it were to pick Hyundai-Kia, Apple’s approach to producing cars would seem to be similar to the way it produces iPhones with a third-party manufacturing partner. In this case, Apple could benefit from the car company’s supply chain and vehicle engineering while focusing on its experience in design, software and digital features.
Government pressure, especially in China, appears to be pushing the global industry to electrification in coming years, raising the possibility for new players to dethrone giants such as Volkswagen AG, Toyota Motor Corp. and General Motors Co. —which all sell millions of vehicles a year. In recent months, auto executives have been racing to establish their green bona fides to offer assurance that they’ll have a place in that future. GM, for example, has said it aspires to stop selling gas-powered vehicles by 2035.