Apple Car (AAPL) Team Discusses EV Plans With Key Components Manufacturers During a Secretive Korean Jaunt Over the Weekend
Apple Car, the iPhone manufacturer’s electric vehicle program under the ambit of Project Titan, continues to be an active subject of the tech-focused rumor mill amid the customary tight-lipped approach of the world’s largest company by market capitalization.
Now, however, fresh reports out of South Korea indicate that the Apple Car program is progressing ahead at a fairly steady pace. To wit, Korea Times is now citing an industry source to report that the Apple Car team met key Korean EV components manufacturers over the weekend. The list purportedly includes SK Innovation, the EV-focused battery manufacturing arm of SK Group, as well as LG Electronics, which recently established a joint venture – dubbed the LG Magna e-Powertrain – with the Canadian auto parts manufacturer, Magna International (NYSE:MGA). Moreover, as per the report, the Apple Car team also met with the Hanwha Group, a large South Korean business conglomerate.
Bear in mind that Korea Times had indicated a few months back that the joint venture between LG Electronics and Magna International was close to winning a manufacturing contract for the Apple Car. Nonetheless, this development has yet to officially materialize. Should this collaboration materialize, it would allow Apple to better utilize its existing synergies with LG affiliates. Additionally, Apple would then be able to tap into Magna’s substantial manufacturing prowess. As a refresher, Magna already has production contracts with around 45 OEM customers, including Toyota, BMW, Honda, Hyundai, Volvo, Volkswagen (VW), and Fisker (NYSE:FSR). Recently, the company signed an agreement with the Israeli startup REE Automotive to build its modular skateboard platform for electric vehicles.
In another important insight gleaned from this weekend’s developments, Apple (NASDAQ:AAPL) seems to be leaning toward the cheaper lithium iron phosphate (LFP) batteries for its EV project. While these batteries do pose a cost advantage, they provide poor performance in cold temperatures. If this speculation pans out, Chinese battery manufacturers would retain an overall edge, particularly as the South Korean ones specialize in the more expensive lithium-ion cells. It is for this reason that some analysts view Contemporary Amperex Technology Ltd. (CATL) as the favorite for winning a contract to manufacture the Apple Car batteries. Of course, CATL already collaborates with Tesla and Volkswagen and can serve as an effective production partner for Apple.
As far as reported details of the Apple Car’s production are concerned, a prototype is expected by 2024. Moreover, initial production volume is expected to be quite low as Apple evaluates the EV’s prospects and its market reception. Of course, Apple may eventually rope in other manufacturers and supply chain partners for its EV project.