Apple is said to be partnering with Kia to build an autonomous electric car. A South Korean newspaper reports that Apple and Kia will announce their $3.6 billion deal soon. Apple stock was little changed by the news, but Kia shares jumped by about 10% after the report, rising to their highest level since 1997.
Apple reported to be investing in Kia
South Korea's Dong-a llbo newspaper reports that Apple will purchase an equity stake in Kia for $3.6 billion. The money will go to construct a factory that will build the self-driving electric car in Georgia. Production will reportedly start in 2024, with 100,000 cars being produced per year. The newspaper also said the plant would be able to ramp up to make 400,000 cars annually.
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Apple has plenty of cash to make the transaction happen. Fox Business notes that its latest earnings report showed that it has $195.57 billion in cash on hand. Dong-a llbo reports that Apple and Kia will make the official announcement about the deal on Feb. 17.
Kia's parent company, Hyundai, is also expected to play a role in the deal. The South Korean newspaper said the Hyundai Glovis shipping segment would "play a significant role in the Apple Car business." That suggests global exports are being planned. Neither company is commenting on the report.
Not the first report
Fox Business pointed out that this isn't the first time Apple has been linked to Kia and Hyundai in rumors about its self-driving electric car. A Hyundai spokesperson confirmed last month that it was negotiating with Apple. The automaker then issued a regulatory filing stating that "it has received requests for potential cooperation from various companies on developing autonomous EVs."
Reuters reported last week that Hyundai decided to shift its work on the Apple car to Kia to retain Hyundai's images as an independent automaker instead of a contract manufacturer. This year, the two companies are planning to launch a new electric vehicle platform, which can be used with various types of vehicles.
The platform reportedly offers a range of more than 300 miles per charge. According to MacRumors, TF Securities analyst Ming-Chi Kuo said in a recent note to investors that Hyundai and Kia's new electric vehicle platform could be the base for the Apple car.