Hyundai and Kia's plan to build Apple car scuttled

Hyundai Motor Group (HMG) has admitted it has broken off talks with Apple to build the tech giant's upcoming autonomous pure-electric car.

Just months after HMG announced it was in early talks with Apple, news that the deal was off saw shares in the Korean car-maker slump by six per cent, wiping $US3 billion ($A3.9bn) off Hyundai's market value and an incredible 15 per cent ($A7.1bn) off Kia's worth.

According to reports, the deal between Hyundai and Apple sparked an internal conflict at the car-maker over fears that such an arrangement would push the Korean auto giant towards more of a contract manufacturer.

It was suggested that if the resulting Apple car became a success, it could jeopardise HMG's own forthcoming range of electric vehicles.

Originally, it was expected that Apple's car, developed under the Project Titan name, would sit on HMG's new E-GMP architecture and possibly come with plenty of Hyundai/Kia components, but the pioneering batteries and advanced autonomous driving aids would be developed solely by Apple.

Commenting on the Hyundai-Apple breakdown in negotiations, Hyundai said in a statement: "We are receiving requests for co-operation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided.

"We are not having talks with Apple on developing autonomous vehicles."

As part of the original arrangement, which saw Kia shares rocket by 61 per cent, Hyundai confirmed it would launch the Apple self-driving EV by 2027 and help develop its batteries.

Production of the Apple car, meanwhile, was scheduled to be based at either a Hyundai or Kia plant in the US.

According to reports, the deal was almost done, with a signing ceremony pencilled for February 17 before one of the parties pulled the plug.

Raising plenty of eyebrows within the industry even at the possibility of a deal with Apple, Hyundai has traditionally shunned any suggestion of joint ventures, preferring to produce everything in-house.

This extends to making its own engines and transmissions, and even its own steel.

A senior Hyundai insider commentating on the deal to Reuters said: "We are agonising over how to do it, whether it is good to do it or not.

"We are not a company which manufactures cars for others."

According to the news source, the Apple-Hyundai partnership negotiations actually date back to 2018 with the two were planning to produce a passenger vehicle with Apple's pioneering battery tech as early as 2024.

The insider didn't reveal why the deal collapsed but other analysts suggest it was because Apple was insisting Hyundai's role would be simply as a manufacturer, rather than a strategic partner.