Yes, but Kia would get to keep the factory after. The point to the arrangement is that the target gets the money upfront for capital expenditures and doesn’t have to worry about the deal falling apart halfway and being left with a bunch of underutilized factories.
Obviously I don’t know the terms of the arrangement, just that from appearances it looks like a classic Apple strategy. Capital investements have been a big roadblock to EVs in general, and only recently have automakers made big investments like the ones you cited. Not too far back, their position was that the risk of the public rejecting their EVs was too high to justify multi-billion dollar investments. And they weren’t exactly wrong about that since many of their EV products have been kinda crappy. They’re starting to see the writing on the wall, though.
You’re right about the classic Apple strategy, but that strategy pertains more to how Apple deals with its component suppliers (like the sapphire crystal company you mentioned). It’s possible Apple views Kia more as its automotive version of Foxconn or Pegatron; that is to say, Kia isn’t going to manufacture anything (or much) per se, they are just going to assemble it. In fact, it seems like one the reasons Apple is talking to Kia is because Kia already has the factory and the extra capacity so their factory is already underutilized.
But something important to keep in mind is that the $3.6-billion-to-Kia story was, apparently, published without citing any sources at all.
Obviously neither of us really know the terms, so this is all conjecture, but I’m not sure “they get to keep the factory” is meaningful here. First, Kia already owns the factory. It’s theirs, it’s built and it’s up and running. Second, if this Apple Car project gets scuttled, having a factory that was refitted to build it isn’t super useful to Kia since they’ll likely have to refit it again for whatever the next product is, and that could cost billions.
There’s of course lots of ways to reuse things and a basic modernization is valuable regardless of what they end up building, plus Kia has big EV plans so adapting to build a Kia branded EV there probably wouldn’t require a complete refit.
Big picture, while this could function similarly to those other partnerships Apple leveraged, I don’t think this Apple-Hyundai/Kia marriage would necessarily follow the pattern. Kia is obviously a big player themselves and don’t really need to bend over backwards to convince Apple to buy from them the way a smartphone parts maker would. This isn’t a make or break deal the way that Sapphire glass opportunity was. Also, it doesn’t sound like this is a “Apple will use you as a exclusive supplier” deal, it’s much more of a partnership of peers than those OEM relationships are. Hyundai has signaled to the media that they are not interested in being just a contract manufacturer for Apple.
As I said, all conjecture so probably just academic at this point.
The iPhone hardly targets the well-heeled. It’s not as if it costs $10,000 but instead is affordable by many people of lesser means. I suspect the same will be true of the car.
Status does not always correspond with price (although, imo, iPhones are overpriced for what they are). It is my strong belief that many of those waiting in the long lines for the latest iPhone on day one of release are looking to own a status symbol, even if a relatively meager one.
Time will tell if this pans out, but I have to confess this will be wildly disappointing if true. These cars sound like boring fleet vehicles which might be in the same broad category as the Grumman LLV, VPG MV-1 and the Transit Connect, but autonomous. Not the kind of thing that the average consumer would ever get to enjoy except for the stuff that it delivers.
Now I suppose that the market for robotaxis and delivery robots is pretty big, they’ll also be commodity vehicles. Not a premium product like Apple specializes in.
Not sure if this is just us weebs thinking that Apple should build a sexy iPhone on wheels while the real money is in the AI and software or what. Apple’s mostly a consumer products company, so building sexy personal driving machines feels like the natural progression. But it seems like they want to focus on the autonomous software aspect as the priority. They are probably reading the market better than me, but this means we’re a long, long ways from being able to buy an Apple Car for ourselves.
Is it really a status symbol anymore when roughly half of all smartphones in the US are iPhones and there are over one billion active iPhone users across the globe?
I was saying that the Tesla targets the well-heeled. Not Apple. Apple most definitely positions itself as the top-tier product in all it’s segments so if you extrapolate it to cars they’d be selling in that $75K+ range.
But a lot more people can afford an iPhone than can afford a $75000 car. Remember, too, that the average price for a new car is around $40000, which is a lot more than I spent ten years ago.
On the other hand, this is supposedly a self-driving electric car, so particularly if the self-driving bit actually works, a premium price is justified.
You and me both. But really, if this is really the first workable self-driving electric car, a premium price is well justified. But the nature of technology is that it become cheaper very quickly.
