A month after it confirmed early stage talks with Apple, South Korea’s Hyundai Motor Co revealed on Monday that it is not now in talks with Apple Inc on autonomous electric cars.
The announcement has sent the automaker’s shares skidding. Wiping $2.4 billion off its market value, Hyundai stock slumped 4.3%.
Shares in Hyuandai’s affiliate, Kia Corp, which had been tipped in local media reports as the likely operational partner for Apple, slumped 12.8% – a $4.7 bilion hit.
The announcement brings the curtain down on weeks of internal divisions at Hyundai Motor Co Group about the potential partnership.
Some executives have raised concerns about becoming a contract manufacturer for the U.S. tech giant in a tieup reminiscent of electronics firm Foxconn’s role in making device for Apple like the iPhone.
Kia shares had jumped 61% since Hyundai initially confirmed a local media report early in January that Apple and Hyundai were in discussions to develop self-driving electric vehicles by 2027 and develop batteries at U.S. factories operated by either Hyundai or Kia.
As recently as last week, media outlets including CNBC reported that a deal was close to being finalised. One South Korean report said the two companies were set to sign the deal on Feb. 17.
People with knowledge of the matter claimed that although shares in Kia and Hyundai had surged on news of the talks, internal opposition to becoming an Apple contract manufacturer was considerable.
Apple, known to keep product plans under tight wraps, has never acknowledged talks with the automaker about building vehicles, and wasn’t immediately available for comment outside business hours in the United States.
Analysts said talks might have collapsed over leaks of the partnership plan to media, or over possible insistence by Apple that Hyundai’s role in any tieup would be that of an equipment manufacturer, rather than a strategic partner.