Motional is losing funding from one of its main sponsors as it tries to launch a robotaxi service in 2024.
Hyundai’s $4 billion joint venture with Aptiv, an automotive supplier, announced Wednesday that it will no longer invest in Motional.
“While our Motional joint venture continues to make progress on their technology roadmap, we’ve decided to no longer allocate capital to Motional and are pursuing alternatives to further reduce our ownership interest,” Aptiv Chairman and CEO Kevin Clark said on Wednesday’s fourth-quarter earnings call. 
“The costs related to delivering the tech, principally in and around hardware, really make it challenging from an adoption standpoint in the mobility on-demand market,” Clark said.
Thus, starting a robotaxi service is expensive and takes too long for Aptiv to recoup its costs.
Later, Aptiv CFO Joe Massaro said the business is “exploring steps to reduce a significant portion of our common equity while working within the construct of the joint venture agreement.” The reduction’s date is unknown, he added.
Motional, a Las Vegas autonomous car taxi service on Uber, Lyft, and Via with human safety operators, dismissed Aptiv’s statement in its quarterly earnings call.
“We’re confident in our funding roadmap and are well-positioned for the next phase of our commercialization,” the business emailed. “Our team is increasing autonomous services, establishing commercial relationships, and developing Motional’s next-generation robotaxi with Kia. Aptiv and the Hyundai Motor Group remain Motional stockholders, with no ownership changes. Our strategic connections with shareholders position Motional distinctively, and we continue to enjoy their strong support and collaboration.”
Moving roots
Motional was absent from an Aptiv-Hyundai board meeting.
Boston-based nuTonomy, established by Karl Iagnemma and Emilio Frazzoli in 2013, was one of the first to test driverless vehicles on public roads. Delphi bought NuTonomy for $450 million in 2017. Delphi separated into two companies: Delphi Technologies focused on powertrains, while Aptiv designed and produced electrical systems, advanced safety technologies, and autonomous vehicle hardware and software. Aptiv acquired nuTonomy.
Two years later, Hyundai and Aptiv launched Motional to market self-driving cars as the buzz and promise of autonomous vehicles peaked. Motional was led by Aptiv’s autonomous mobility group president, Iagnemma.
The firms stated their $4 billion joint venture investment included engineering services, R&D, and IP. Aptiv would provide its autonomous driving technology and 700 personnel, while Hyundai Motor Group will invest $1.6 billion in cash from its sub-brands, car engineering, R&D, and IP.
It wanted to start testing its AVs in 2020 and commercialize them by 2022, which seems absurd but was the goal of a young, ambitious business. Motional, like the industry, has altered its commercial goals.
An autonomous Hyundai Ioniq 5 robotaxi service is scheduled to begin in 2024, and the business has made some headway. At the Hyundai Motor Group Innovation Center Singapore, Hyundai Motor Group and Motional revealed intentions to co-develop production-ready versions of the all-electric Ioniq 5 robotaxi in November. A production-ready autonomous vehicle with redundancy for safe operations without a driver is essential for commercial operations.
Boston, Pittsburgh, Las Vegas, Los Angeles, and Singapore are where the business is testing autonomous vehicles with human safety operators. It operates an autonomous delivery service with Uber Eats in LA. The business revealed its intentions to cooperate with Kia on a next-generation car for commercial use later this decade at CES 2024. The business says work will begin this year.
