Hyundai may not be the only partner for Apple on electric vehicles, Wedbush analyst says

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Hyundai may not be the only partner for Apple on electric vehicles, Wedbush analyst says


Shares of Hyundai Motor soared on Friday on the news that it is in talks to join with technology icon Apple to make a self-driving electric vehicle.

But one analyst says even if those talks come to fruition, Apple
AAPL,
+3.41%

still may reach deals with other automobile makers — and possibly even Tesla
TSLA,
+7.94%
.

“We believe based on our investor conversations over the last few weeks that many on the Street would rather see Apple partner on the EV path, than start building its own vehicles/factories given the margin and financial model implications down the road, coupled with the strategic product risk around such a gargantuan endeavor,” said Dan Ives, the veteran tech analyst at Wedbush Securities.

“This speaks to our view that the chances of a strategic partnerships with the likes of a Tesla, VW
VOW3,
-0.73%
,
Hyundai
005380,
+19.42%

or other auto manufacturers in China (e.g., Nio
NIO,
+7.49%
,
Xpeng
XPEV,
+9.12%

) are in the 70%+ range over the next few years and could lay the groundwork for a dual path (start building its own line of EV autos post 2025) over the next decade if this EV/autonomous venture is successful with consumers,” he added.

Chinese tech stalwart Baidu
BIDU,
+1.92%

may choose a similar path, opting to partner rather than make its own vehicles, Ives added. Baidu already has an autonomous driving unit, Apollo.

Ives reiterated his outperform and $160 price target on Apple, which ended Thursday at $130.92. Apple shares have gained 69% over the last 12 months.



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