Motional, the autonomous vehicle startup that emerged from a $4 billion joint venture between Hyundai and auto supplier Aptiv, will cease commercial operations and delay plans to launch a driverless taxi service as it undergoes restructuring, according to TechCrunch. The goal is to advance the core technology and business model while preserving capital, according to sources familiar with the changes.
Motional has advanced its plan to launch a commercial driverless robotaxi service with its second-generation AV — the Hyundai Ioniq 5 — to 2026, two years later than planned.
The company told employees Tuesday during a wrap-up meeting that the changes would include layoffs, but did not provide a figure for how many people would be affected, according to sources who spoke to TechCrunch on condition of anonymity. Motion began notifying employees if they were fired shortly after the meeting ended. The company employed more than 1,300 people before reducing the workforce by 5% in March 2024.
Motion will discontinue its commercial operations, which currently include taxi rides in Hyundai Ioniq 5 autonomous vehicles in Las Vegas through the Uber and Lyft network. The company will also end deliveries for Uber Eats customers in Santa Monica using its self-driving vehicles. A human safety operator is behind the wheel of all his commercial activities.
Instead, Motion plans to allocate more resources to developing the core technology. That will mean more testing, which will likely include an expansion to other cities, a familiar source told TechCrunch. Motion is testing its technology in Boston, Pittsburgh and Las Vegas. Motion CEO Karl Iagnemma as well published a blog post shortly after the end of the meeting, which outlines its plans to “focus resources on the continued development and generalization of our core driverless technology while de-emphasizing near-term commercial developments and ancillary activities.”
“Driverless vehicles will enter the market when the technology has evolved and – just as importantly – when the business case for autonomous development is clear,” Iagnemma wrote in the blog. “While we are excited about the pace of our technical progress and our initial commercial deployments have yielded valuable insights, large-scale AV deployment remains a goal for the future, not the present.”
Workers were told that persistently high costs of running commercial operations combined with expensive autonomous vehicle technology components make the business case difficult today. During the all-hands, Iagnemma told employees that the vision had not changed and that Hyundai’s recent investment in Motional is a sign of the company’s support and belief that they are on the right track, according to sources who heard the call .
The restructuring comes less than a week after Hyundai Motor Group invested nearly $1 billion in Motional as part of a broader deal that included the acquisition of part of consortium partner Aptiv. About half of that amount, $475 million, goes directly into Motional’s coffers. The remaining $448 million was used to purchase 11% of Aptiv’s common stock in Motional.
Hyundai’s new investment brings Motional’s valuation to $4.1 billion, according to sources on the call. This is roughly the same valuation as Motional in 2020.
Earlier this year, Motional’s future was thrown into doubt after Aptiv announced plans to reduce its ownership interest and stop pouring capital into the business due to the high cost of commercializing a robotaxi business and the long road to profitability. Aptiv expects to reduce its common equity in Motional from 50% on March 31 to about 15%, leaving Hyundai in control of the remaining 85%.
