Hyundai has agreed to spend nearly $1 billion on Motional, an investment that will give the automaker a majority stake while also providing the self-driving startup with the capital needed to continue operating.
The Korean automaker invested $475 million directly in Motional as part of a broader deal that includes the purchase of its joint venture partner Aptiv. As part of the deal, Hyundai will spend another $448 million to buy 11% of Aptiv’s common equity stake in Motional, according to information revealed Thursday in Aptiv First Quarter Earnings Report.
Aptiv also shared that it expects to reduce its common shareholding in Motional from 50% as of March 31 to approximately 15%, leaving Hyundai with the remaining 85% control. Aptiv Chairman and CEO Kevin Clark said in January that the company would reduce its stake in Motional. The company said at the time that it would stop allocating capital to Motional due to the high cost of marketing a robotaxi business and the long road ahead to turn a profit.
Aptiv on Thursday lowered its full-year net sales forecast for 2024 to between $20.85 billion and $21.45 billion, down from between $21.3 billion and $21.9 billion.
Motional confirmed the new funding round and Hyundai’s increased stake, but did not confirm Aptiv’s numbers. Hyundai, however, said the amounts listed in Aptiv’s earnings report were accurate.
Image Credits: Aptiv Investor Relations
Motional began as nuTonomy, a Boston-based autonomous vehicle startup, in 2013, before being acquired by Delphi for $450 million. Delphi would later split its business with the Aptiv unit absorbing nuTonomy. The entity became Motional under 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 financials amid an outlook Less positively, the company’s withdrawal and Hyundai’s move forward raise questions about Motional’s future.
In March, TechCrunch reported that Motional took out a bridge loan for an undisclosed amount as a lifeline while the AV startup secured its next, longer-term funding round. While this funding round from Hyundai likely fits those requirements, Motional has not responded to TechCrunch’s request for more information about whether it will need to acquire more investors in the future.
Motional has been 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 involves partnering with existing transportation platforms like Uber, Lyft and Via to offer rides to customers. Motional 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 all-electric Ioniq 5 robotaxi at the automaker’s new innovation center in Singapore, the Hyundai Motor Group Singapore Innovation Center (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 initial stages of development beginning this year.
Motional’s financial changes come as the robotaxi industry continues to face uncertainty. The startup has slowly moved toward commercialization, launching pilots in at least five cities. Crucially, Motional has not yet started charging for rides or deliveries. Meanwhile, among the competition, Waymo continues to expand its paid, fully autonomous robotaxi service in San Francisco, Los Angeles and Phoenix, with plans to reach Austin later this year. GM’s Cruise is still mostly off the streets after an incident in October 2023 that left a pedestrian trapped and dragged by one of its robotaxis, but the company has begun mapping again in Phoenix as part of a slow, reintroduction. deliberately to public roads.
Then there is Tesla. CEO Elon Musk has restructured his company, laying off thousands and increasing investment in artificial intelligence, with a stated goal of “hitting the walls for autonomy” and delivering a robotaxi in August.
This article has been updated to include confirmation from Hyundai.
