Tesla’s success has made Elon Musk the world’s richest man. But Tesla’s leadership in electric cars has serious competition, with Apple among the contenders. Hyundai Motors has confirmed early stage discussions with the US devices giant to produce self-driving electric cars.

The tie-up with the South Korean carmaker is at a very early stage. Any Apple car is at least five years away from market. But investors are bullish. Hyundai’s share price soared 19 per cent on Friday. Apple can bring huge financial, marketing and design muscle to the venture.

“Project Titan” — Apple’s electric car development plan — has been under way since 2014. But the smartphone specialist lacks the large-scale production capacity and the automotive technology to turn its designs and patents into cars. It needs an experienced partner.

Hyundai is a good choice. It operates the world’s largest integrated production facility with a dedicated platform for electric and hydrogen cars. It makes its own parts through subsidiaries. A vertically integrated supply chain should keep costs under control.

The automaker has invested billions in driverless cars and solid state batteries. Autonomous driving functions launch on its cars next year. Hyundai claims to have almost 6 per cent of the world’s electric vehicle market and plans to more than triple output of EVs to 560,000 by 2025.

Cash-rich Apple could provide much-needed financial support. Hyundai’s operating cash flow has only covered its investments twice since 2014 when 2020 estimates are included.

There are obstacles to a tie-in. Apple might instead adopt an iPhone-style production system — outsourcing parts to contract manufacturers such as Canadian auto parts maker Magna and Taiwan’s Foxconn. An Apple/Hyundai tie-up could cannibalise demand for Hyundai’s own family of self-driving electric cars.

Even after Friday’s gains, Hyundai shares still languish below book value. The stock looks cheap. Hyundai is one of the few manufacturers positioned to control the full value chain of a high-growth smart electric car range. As such, the stock still offers affordable exposure to the eagerly awaited Apple car.

The Lex team is interested in hearing more from readers. Will Apple and Hyundai be able to disrupt Tesla, which is so far ahead of them? Please tell us what you think in the comments section below