Apple is set to sign a memorandum of understanding for the production of electric vehicles with a joint venture company recently created by South Korean electronics and battery specialist LG Electronics and Canadian-based automotive supplier Magna International, according to reports out of South Korea.
An LG Group source with apparent knowledge of the terms of the deal tells The Korean Times that the JV, LG Magna e-Powertrain, “is very near to signing contracts with Apple under which they could handle the initial volume production of Apple electric vehicles. Contract details are still being discussed.”
The English-language newspaper reports the EV production volume planned by Apple will remain limited as the U.S.-based consumer electronics giant tests the market in a similar way to its initial messaging pads and smartphone offerings, which were developed in partnership with Motorola.
“Apple is mostly intending to use its first-generation electric vehicles as an opportunity to evaluate their marketability,” the LG source tells the Times.
The source also says the existing collaboration between Apple and LG Group will alleviate any supply chain concerns.
“Because LG Group affiliates including LG Display, LG Chem, LG Energy Solution and LG Innoteck are already included in Apple’s parts supply chain, Apple doesn’t have to worry about any supply chain issues,” the source says. “These LG affiliates are qualified to guarantee production yields and faster delivery of parts needed for Apple electric vehicles.”
Officials with Magna in Detroit and Magna Steyr, the Austria-based contract vehicle manufacturing arm, declined to comment “on the speculation” for WardsAuto. Apple and LG Electronics have not commented on the report.
News of Apple’s intention to renew its plans for an EV to challenge the likes of Tesla surfaced in December. At the time, reports quoting insiders at the iPhone maker suggested it already had targeted 2024 for the introduction of its first model.
Apple originally kicked off development of an EV in 2014 as part of an in-house project known as Project Titan. It subsequently scaled back the operations and staff to focus on autonomous driving software development in a consolidation of its electric vehicle plans.
At the time, Project Titan was headed by Doug Field, a longtime Apple employee who had worked at Tesla.
Since then, Apple has revived the project to a point where it now is claimed to be seeking development, supply chain and manufacturing support.
LG Magna e-Powertrain was established in December as a JV by LG Electronics and Magna “to manufacture e-motor, inverters and on-board chargers and, for certain auto makers, related e-drive systems to support the growing global shift toward vehicle electrification.”
The JV company, which is planned to employ more than 1,000 at LG Group locations in the U.S., South Korea and China, is expected to be granted approval to trade in July 2021, pending LG and Magna shareholder approval and the necessary regulatory clearance, according to a recent joint announcement by LG Electronics and Magna.
Equity in LG Magna e-Powertrain, headquartered in Incheon City, South Korea, is estimated at $925 million. LG Elect