Autonomous vehicle company Motional is losing capital backing from one of its main backers as it aims to commercialize a robotaxi service in 2024.
Auto supplier Aptiv — the other half of a $4 billion joint venture with Hyundai that created Motional — said Wednesday it would no longer commit funds to the effort.
“While our joint venture Motional continues to make progress on its technology roadmap, we have decided to no longer invest in Motional and are looking for alternatives to further reduce our ownership interest,” Aptiv President and CEO Kevin Clark said in a statement. during the company’s fourth report. Quarterly earnings call Wednesday.
“The cost associated with delivering the technology primarily, in and around the hardware, makes it really challenging in terms of adoption in the on-demand mobility market,” said Clark.
In other words, taking on a robotaxi service is expensive, and the timeline for recouping those precious dollars is too long for Aptiv to wait.
Aptiv CFO Joe Massaro later added that the company is “exploring steps to reduce a significant portion of our common equity while working to construct the joint venture agreement.” The exact timing of the reduction is not yet known, he said.
Motional, which operates an autonomous vehicle taxi service in Las Vegas (with human safety operators behind the wheel) on the Uber, Lyft and Via platforms, has been downgraded Aptiv’s announcement in its quarterly earnings.
“We are confident in our funding roadmap and are well positioned for the next phase of our commercialization,” the company said in an emailed statement. “Our team is focused on scaling our driverless services, expanding Motional’s commercial partnerships and further developing Motional’s next-generation robotaxi in partnership with Kia. Aptiv and Hyundai Motor Group remain shareholders of Motional and there are no ownership updates at this time. Motion is uniquely positioned through our strategic partnerships with our shareholders and we continue to have their strong support and cooperation.”
Kinetic roots
Motion was not made at a board meeting of Aptiv and Hyundai.
In 2013, Karl Iagnemma and Emilio Frazzoli founded nuTonomy, a Boston-based autonomous vehicle startup that was among the first to successfully test the technology on public roads. Delphi car parts supplier acquired nuTonomy in 2017 for $450 million. Delphi would later split into two companies: its engine business became Delphi Technologies, while Aptiv would focus on the design and production of electronic systems, advanced safety technology, and the hardware and software needed for autonomous vehicles. nuTonomy was absorbed into Aptiv.
Two years later, as the hype and promise surrounding autonomous vehicles peaked, Hyundai and Aptiv formed a joint venture—later called Motional—to commercialize self-driving cars. Iagnemma, who was president of Aptiv’s standalone mobility group, has been tapped to head Motional.
At the time, the companies said the combined investment in the joint venture would amount to $4 billion in total value, including the value of combined engineering, R&D and IP services. Aptiv agreed to bring its self-driving technology and about 700 employees, while Hyundai Motor Group said it would provide a total of $1.6 billion in cash from all its sub-brands, vehicle engineering, research and development and access on its IP.
Its goal was to start testing its AVs in 2020 and commercialize the technology by 2022, a goal that now seems outlandish but is in line with the rest of the emerging and up-and-coming industry. Motion, along with the rest of the industry, has since adjusted its commercial goals.
And the company has made some progress toward its goal of launching a robotaxi service using Hyundai Ioniq 5 driverless vehicles in 2024. In November, Hyundai Motor Group and Motional announced plans to jointly develop production-ready versions of the all-electric Ioniq 5 robotaxi at the new automotive innovation center in Singapore, the Hyundai Motor Group Innovation Center Singapore (HMGICS). A production-ready autonomous vehicle equipped with the kind of redundancies designed for safe operations without a human driver is a critical milestone required for commercial operations.
The company is testing its self-driving vehicles — always with human safety operators behind the wheel — in Boston, Pittsburgh, Las Vegas, Los Angeles and Singapore. It also operates a standalone delivery service in Los Angeles with Uber Eats. During CES 2024, the company announced plans to work with Kia on a next-generation vehicle that will enter commercial operations later this decade. The initial development process will begin this year, according to the company.
