One rather hot topic related to consumer electronics and smartphone producer Apple centers around the company’s not so secret Apple Car development plans.  The company’s off and on-again development status, along with what manufacturing strategy Apple will eventually elect to produce its cars, if this effort comes to fruition over the next five years.

Apple supply chain strategies

Speculation around Apple’s secretive project to design and sell its own car re-emerged in December, with Hyundai Motor Co. subsidiary Kia Motors as a potential partner. In early February, The Wall Street Journal, citing sources, had reported that the U.S. arm of Hyundai, Kia Motors, was secretly talking to potential partners about a plan to assemble the Apple vehicle. That was followed by a report by Business Network CNBC indicating that the consumer electronic manufacturer was close to finalizing a deal to build vehicles at Kia’s U.S. facility, with scheduled production occurring in 2024. The report stressed that no agreement had been reached.

Separately, Asia based Nikkei news had reported that Apple was also in discussions with at least six other automakers.

As the news concerning a potential Kia partnership spread, Apple put the squash on all activity related to Hyundai and Kia causing an admission from Hyundai that any talks were off.

Alas the automaker may have broken Apple‘s code of secrecy.

Meanwhile, Supply Chain Matters has highlighted initiatives by high tech electronics contract manufacturer services provider Foxconn to begin developing capabilities for producing electric powered automobiles.

In October, the CMS introduced an electric vehicle chassis platform to assist electric automakers to ramp-up production more quickly, and in January of this year, a partnership with China based Geely Motors, as well as a recently announced agreement with innovative start-up automaker Fisker. In the announcement, CEO Henrik Fisker indicated in a press event that there was a good chance that initial production could be at Foxconn’s planned Mount Pleasant Wisconsin production complex.

Last week, Bloomberg reported that Apple may likely tilt toward its long-standing contract manufacturing partner Foxconn.

According to this report, (Paid subscription or complimentary metered view) Apple may now have three options regarding manufacturing needs; build its own facilities or team up with either Foxconn or Canada based Magna International. Industry experts are quoted as indicating that Apple would likely opt for a contract manufacturing strategy because that has been the strategy always favored.

This report further indicates that Magna International was in initial talks five years ago when Apple initially established the company’s electric car initiative. Magna has established contract manufacturing relationships with luxury auto brands BMW, Daimler and Jaguar Land Rover.

The other related theme here is that the Foxconn or Magna options provide for North America based production. That may be an important consideration for initial availability of an Apple branded electric car since transportation costs for autos are more expensive than that of smartphones and consumer electrics.

No doubt there will be further speculation and buzz in the coming months as well.


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