Hyundai has committed to investing close to $1 billion in Motional, securing a majority stake in the self-driving startup, and ensuring its continued operation with the necessary capital.
The Korean automaker has made a direct investment of $475 million into Motional as part of a larger agreement, as well as acquiring its joint venture partner Aptiv. Hyundai has committed to investing an additional $448 million to acquire an 11% stake in Motional, as disclosed in Aptiv’s first-quarter earnings report.
In addition, Aptiv has announced its plans to decrease its common equity interest in Motional from 50% as of March 31 to approximately 15%. This will give Hyundai the majority control of 85%. In January, Aptiv chairman and CEO Kevin Clark indicated that the company would be decreasing its ownership stake in Motional. At the time, the company announced its decision to halt capital allocation to Motional. This was due to the significant costs involved in commercializing a robotaxi business, as well as the considerable journey towards profitability.
On Thursday, Aptiv adjusted its projected net sales for the full year of 2024 to a range of $20.85 billion to $21.45 billion, which is slightly lower than the previous estimate of $21.3 billion to $21.9 billion.
Motional has officially announced the latest funding round, as well as Hyundai’s increased stake. However, they have not disclosed the specific figures regarding Aptiv’s involvement. Hyundai, on the other hand, confirmed the accuracy of the amounts listed in Aptiv’s earnings report.
In 2013, Motional started as nuTonomy, a Boston-based startup specializing in autonomous vehicles. Delphi later acquired it for a significant sum of $450 million. Delphi later divided its operations, with the Aptiv unit incorporating nuTonomy. Hyundai and Aptiv rebranded the entity as Motional in 2019 through a $4 billion joint venture. From Aptiv’s earnings report, it is evident that the company is making efforts to mitigate risks and improve its financial situation in light of a less favorable outlook. However, the fact that Aptiv is pulling back while Hyundai is moving ahead raises concerns about the future of Motional.
In March, Eltrys reported that Motional obtained a bridge loan to support its operations while the AV startup secured additional funding for the future. While it’s likely that Motional’s needs align with this funding round from Hyundai, the company has not responded to Eltry’s request for additional information about the potential for future investor acquisitions.
Motional has been conducting tests of its autonomous vehicles in various cities, including Boston, Pittsburgh, Las Vegas, Los Angeles, and Singapore, with a safety driver present. The company’s strategy for entering the market involves forming partnerships with established ride-hail platforms such as Uber, Lyft, and Via to provide customers with transportation services. Motional has announced its intention to launch a robotaxi service in 2024, utilizing driverless Hyundai Ioniq 5 vehicles.
In November 2023, Motional and Hyundai revealed their collaboration to develop production-ready versions of the all-electric Ioniq 5 robotaxi at the Hyundai Motor Group Innovation Center Singapore (HMGICS). This partnership marks an exciting step forward in the automotive industry. Motional made an exciting announcement at CES 2024 about their collaboration with Kia on a cutting-edge vehicle set to launch in the coming years. Already in its initial development stages, the project is poised to revolutionize commercial operations in the automotive industry.
The financial changes at Motional coincide with ongoing uncertainty in the robotaxi industry. The startup has been steadily progressing towards commercialization, successfully launching pilots in at least five cities. Importantly, Motional has yet to start charging for rides or deliveries. Meanwhile, in the world of competition, Waymo is making strides in expanding its fully driverless, paid robotaxi service. Currently available in San Francisco, Los Angeles, and Phoenix, Waymo has plans to launch in Austin later this year. GM’s Cruise is gradually resuming its mapping activities in Phoenix as it cautiously prepares for a phased return to public roads. This follows an unfortunate incident in October 2023, when one of its robotaxes trapped and dragged a pedestrian.
