Apple iCar: Cooperation with Kia?

The starting signal is set to fall in 2024: Then, the first iCar is expected to roll off the assembly line in Georgia. To this end, the corporation is investing $3.6 billion in a cooperation with South Korean manufacturer Kia to build autonomous electric cars. This was reported by the US news company Bloomberg, citing the South Korean daily newspaper "DongA Ilbo," which did not name a source. The stock price of Hyundai subsidiary Kia subsequently rose by 14.5 percent. Both companies are expected to sign a cooperation agreement on February 17. According to the newspaper, joint production of the Apple Car is set to start in 2024 at Kia's plant in the US state of Georgia. The production target is initially 100,000 vehicles per year. In early January, Kia's parent company Hyundai confirmed talks with Apple about an electric car partnership.

Stock analysts, however, do not see the deal entirely positively, as Apple's existing business with iPhones, iPads, computers, and software is significantly more profitable than the vehicle business. The issue of "autonomous driving" – even in relation to public transport – is also far from reliably expected to turn a profit.

What does that mean?

It is still somewhat surprising why Apple would want to take on such complex and relatively low-margin "devices" like vehicles. While Kia can certainly provide the platform and production capabilities, the question of the business model from 2024 onwards remains.