Hyundai has committed close to $1 billion towards Motional, a self-driving startup, securing a majority stake in the company and ensuring the startup’s financial stability.
In a significant investment move, the South Korean automaker directly injected $475 million into Motional, alongside a broader agreement that involves acquiring the joint venture partner Aptiv’s share.
Additionally, Hyundai will spend an additional $448 million to purchase an 11% stake in Aptiv’s common equity interest in Motional, as detailed in Aptiv’s first-quarter earnings report released on Thursday, May 2.
Aptiv, on its part, has indicated a plan to reduce its ownership in Motional from 50% as of March 31 to around 15%, allowing Hyundai to take the reins with an 85% controlling stake.
This shift aligns with Aptiv Chairman and CEO Kevin Clark’s earlier announcement in January 2024, highlighting the intention to scale back involvement in Motional.
Aptiv cited the considerable expenses associated with developing a profitable robotaxi business as a primary reason for the strategic pivot, thus halting further financial allocation towards Motional.
Aptiv announced a downward revision of its 2024 full-year net sales forecast, now projected to range between $20.85 billion and $21.45 billion. This adjustment reflects a decrease from the previously anticipated range of $21.3 billion to $21.9 billion.
The journey of Motional traces back to its origins as the Boston-based autonomous vehicle startup nuTonomy, established in 2013.
Later, it was acquired by Delphi for $400 million. Subsequently, Delphi split its business, with the Aptiv unit absorbing nuTonomy. In 2019, Motional emerged from a $4 billion joint venture between Hyundai and Aptiv.
The recent developments, as reflected in Aptiv’s earnings report, suggest a strategic effort to manage risks and optimize finances amidst a challenging business landscape.
Aptiv’s pullback and Hyundai’s expanded involvement raise intriguing questions about Motional’s trajectory and future prospects.
Motional’s Strategic Moves Amid Robotaxi Industry
In March 2024, it was reported that Motional secured a bridge loan for an undisclosed amount as a lifeline while the AV startup secured its next round of longer-term funding.
While it’s likely that this funding round from Hyundai fits that bill, Motional has not disclosed whether it will need to acquire more investors in the future.
Moreover, Motional has actively conducted testing of its autonomous vehicles, deploying them with safety drivers in cities such as Boston, Pittsburgh, Las Vegas, Los Angeles, and Singapore.
The company’s market strategy involves collaboration with established ride-hailing platforms like Uber, Lyft, and Via to offer customers autonomous rides.
Also, Motional has set an ambitious target of launching a robotaxi service utilizing driverless Hyundai Ioniq 5 vehicles by the year 2024.
In November 2023, Motional and Hyundai unveiled plans to collaborate on developing production-ready versions of the all-electric Ioniq 5 robotaxi at Hyundai’s Innovation Center in Singapore.
Additionally, during CES 2024, Motional announced a partnership with Kia to develop a next-generation vehicle slated for commercial deployment later in the decade, with initial development set to commence this year.
Motional’s recent financial maneuvers coincide with ongoing uncertainty within the robotaxi industry. While the startup has made progress towards commercialization, conducting pilots in at least five cities, it has yet to implement fare charging for rides or deliveries.
In contrast, Waymo continues to expand its fully driverless, paid robotaxi service across San Francisco, Los Angeles, and Phoenix, with plans to expand to Austin later in the year.
On the other hand, GM’s Cruise remains largely off public roads following an October 2023 incident involving a pedestrian but has resumed mapping activities in Phoenix as part of a cautious reintegration process.
Then there’s Tesla. CEO Elon Musk has shaken up his company, laying off thousands and increasing investment into AI, with a stated goal to go “balls to the walls for autonomy” and deliver a robotaxi in August.
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