Hyundai has agreed to spend nearly $1 billion in Motional, an investment that will give the automaker a majority stake while 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 buyout of its joint venture partner Aptiv. As part of the deal, Hyundai will spend an additional $448 million to purchase 11% of Aptiv’s common stake in Motional, according to information revealed Thursday in Aptiv’s first-quarter earnings report.
Aptiv also said it plans to reduce its common stake in Motional from 50% as of March 31 to about 15%, leaving Hyundai with the remaining 85% control. Aptiv Chairman and CEO Kevin Clark signaled 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 commercializing a robotaxi business and the long road to profit.
Aptiv on Thursday cut its full-year 2024 net sales forecast to between $20.85 billion and $21.45 billion, from $21.3 billion to $21.9 billion.
Motional confirmed the new funding round and increased stake from Hyundai. The company did not respond to TechCrunch’s inquiry about the accuracy of Aptiv’s numbers. Hyundai also could not be contacted for confirmation.
Image credits: Aptiv Investor Relations
Motional started as Boston-based autonomous vehicle startup nuTonomy in 2013, before being acquired by Delphi for $400 million. Delphi will later split its business with the Aptiv unit absorbing nuTonomy. The entity became Motional as part of a $4 billion Hyundai-Aptiv joint venture in 2019. Although it is clear from Aptiv’s earnings report that the company is trying to manage risk and optimize its finances in a less positive context, the withdrawal of the company and the step forward of Hyundai raise questions about the future of Motional.
In March, TechCrunch reported that Motional had secured a bridge loan of an undisclosed amount as a lifeline while the AV startup secured its next round of longer-term funding. While it’s likely this funding round from Hyundai fits that plan, Motional did not respond to TechCrunch’s request for more information on whether it will need to acquire more investors in the future.
Motional has tested 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 ride-sharing platforms like Uber, Lyft and Via to offer rides to customers. Motional said it aims to launch a robotaxi service using driverless Hyundai Ioniq 5 vehicles in 2024.
Motional and Hyundai announced plans in November 2023 to co-develop production-ready versions of the all-electric Ioniq 5 robotaxi at the automaker’s new innovation center in Singapore, the Hyundai Motor Group Innovation Center Singapore (HMGICS). At CES 2024, Motional also announced plans to work with Kia on a next-generation vehicle that will enter commercial operation later this decade, with the first stages of development beginning this year.
Motional’s financial changes come as the robot taxi industry continues to face uncertainty. The startup is slowly moving toward commercialization, launching pilot projects in at least five cities. Importantly, Motional has not yet started charging for rides or deliveries. Meanwhile, among the competition, Waymo continues to expand its paid, fully driverless robotaxi service to 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 stranded and dragged by one of its robo-taxis, but the company has started mapping again in Phoenix as part of a slow and deliberate reintroduction onto public roads.
Then there is Tesla. CEO Elon Musk has shaken up his company, laying off thousands of people and increasing investments in AI, with the stated goal of going “to the walls for autonomy” and delivering a robo-taxi in August.
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