Hyundai has agreed to spend nearly $1 billion on Motional, an investment that will give the automaker a majority stake while providing the self-driving startup with the capital it needs to continue operating.
The Korean automaker invested $475 million directly in Motional as part of a broader deal that includes the acquisition of joint venture partner Aptiv. As part of the deal, Hyundai will spend another $448 million to buy 11 percent of Aptiv’s common stock in Motional, according to information disclosed Thursday. Aptiv Q1 Earnings Report.
Aptiv also shared that it expects to reduce its common equity interest in Motional from 50% on March 31 to about 15%, leaving Hyundai in control of the remaining 85%. Aptiv President and CEO Kevin Clark indicated in January that the company would reduce its ownership interest in Motional. The company said at the time that it would stop allocating capital to Motional due to the high cost of commercializing a robotaxi business and the long road to profitability.
Aptiv on Thursday cut its full-year 2024 net sales forecast to $20.85 billion to $21.45 billion, from $21.3 billion to $21.9 billion.
Motion confirmed the new funding round and increased Hyundai’s stake, but did not confirm Aptiv’s numbers. Hyundai, however, said the amounts reported in Aptiv’s earnings report were accurate.
Image Credits: Aptiv Investor Relations
Motional started as Boston-based autonomous vehicle startup nuTonomy in 2013, before being acquired by Delphi for $450 million. Delphi would later split its operations with the Aptiv unit absorbing nuTonomy. The entity became Motional as part of a $4 billion Hyundai-Aptiv joint venture in 2019. While it is clear from Aptiv’s earnings report that the company is trying to manage risks and optimize finances amid a less positive outlook, the company’s retreat and Hyundai’s step forward raises questions about Motion’s future.
In March, TechCrunch reported that Motional secured a bridge loan for an undisclosed amount as a lifeline, while the AV startup secured its next round of long-term funding. While it’s possible that this funding round from Hyundai fits that bill, Motional has not responded to TechCrunch’s request for more information on whether it will need to get more investors in the future.
Motional is testing its autonomous vehicles with a safety driver behind the wheel in Boston, Pittsburgh, Las Vegas, Los Angeles and Singapore. The company’s go-to-market strategy includes partnering with existing platforms like Uber, Lyft and Via to offer customers rides. Motion has stated its goal to launch a robotaxi service using driverless Hyundai Ioniq 5 vehicles in 2024.
Motional and Hyundai announced plans in November 2023 to jointly develop production-ready versions of the Ioniq 5 all-electric robot taxi at the automotive industry’s new innovation center in Singapore, the Hyundai Motor Group Innovation Center Singapore (HMGICS). During CES 2024, Motional also announced plans to work with Kia on a next-generation vehicle that will enter commercial operations later this decade, with the initial stages of development beginning this year.
Motion’s financial changes come as the robotaxi industry continues to face uncertainty. The startup is slowly moving towards commercialization, launching pilots in at least five cities. Most importantly, Motional has yet to start charging for rides or deliveries. Meanwhile, amid competition, Waymo continues to expand its fully paid driverless robotaxi service to San Francisco, Los Angeles and Phoenix, with plans to hit Austin later this year. GM’s Cruise is still mostly off the road after an incident in October 2023 that left a pedestrian stuck and swept away by one of its robot taxis, but the company has resumed mapping in Phoenix as part of a slow, deliberate reintroduction on public roads.
Then there’s Tesla. CEO Elon Musk has shaken up his company, laying off thousands and ramping up investment in artificial intelligence, in a stated goal of “falling into the walls for autonomy” and delivering a robotaxi in August.
This article has been updated to include confirmation from Hyundai.
