After weeks of speculations that car manufacturers Kia and Hyundai will soon work on an Apple-inspired car, the deal has been called off. This announcement has affected the stocks of both car manufacturers.
Deal to manufacture Apple Car is 'dead' - Hyundai
South Korean vehicle giant, Hyundai Motor has said it has severed talks with Apple about electric vehicles after confirming last month's talks with the tech giant. The initial talks have seen their shares increased with many buying up stocks in the firm, but with the recent announcement of the cancellation of this deal, about $2 billion value has been wiped off and Hyundai shares slid to 6.1%.
Also, stocks in their affiliate company which was tilled to be a collaborator with Apple went down by 14% which is about $4.8 billion. This sad development brings the climax to an argument between Kia and Hyundai about collaboration efforts.
'' We have gotten several requests for joint partnership with various electric cars from many firms, but for now, there hasn't been any positive development '' Hyundai said.
'' Our firm always believed in complying with stock rules which means we will update our shareholders and investors. As of now, we are no longer discussing creating private cars. ''
Stocks slumped after Monday's announcement
Kia stocks also climbed to 60% when reports started flying in December that they were in discussions with Apple to innovate electric cars by 2028. Hyundai has always been known to have reservations about working with outside firms to produce new inventions.
This has been linked to negative experiences it has faced in the past, and it doesn't want a repeat of such issues. The new drop in price and shares of these tech firms will make their shareholders very uncomfortable, and questions will be asked of the directors. The pandemic has hit the auto industry as production and exports have dropped, but it is expected that sales will improve as lockdown restrictions relax.