Hyundai Invests $1 Billion in AV Startup Motional

Hyundai is set to invest almost $1 billion in Motional, securing a majority stake in the self-driving startup and providing vital capital for its ongoing operations.

Over many years, Motional has dedicated significant resources to developing its autonomous vehicle technology, aiming to release a driverless robotaxi service using Hyundai Ioniq 5 vehicles in 2024. As Motional and Hyundai drew closer, with plans announced in November to collaborate on production-ready versions of the electric Ioniq 5 robotaxi, Aptiv appears to have recognized its financial constraints.

Hyundai’s investment of $475 million straight into Motional is part of a larger agreement that includes buying out its joint venture partner Aptiv. According to details unveiled in Aptiv’s first-quarter earnings report on Thursday, Hyundai will also “purchase 11% of Aptiv’s common equity interest in Motional for $448 million.”

Aptiv has announced its plans to reduce its common equity stake in Motional from 50% as of March 31 to around 15%, allowing Hyundai to hold majority control at 85%. In January, Aptiv’s chairman and CEO, Kevin Clark, mentioned the company’s intention to decrease its ownership in Motional. Meanwhile, Aptiv also stated it would stop allocating capital to Motional due to the considerable costs associated with commercializing a robotaxi business and the extended timeline to achieve profitability.

On Thursday, Aptiv revised its projected full-year net sales for 2024 to range between $20.85 billion and $21.45 billion, a decrease from the initial estimate of $21.3 billion to $21.9 billion.

Motional acknowledged the recent funding round and Hyundai’s increased stake but refrained from confirming Aptiv’s figures. Hyundai, on the other hand, affirmed the accuracy of the amounts disclosed in Aptiv’s earnings report.

This move at Motional comes during a time when there are continued uncertainties in the robotaxi sector. Waymo, a Google subsidiary, dominates in commercialization, having launched a fully driverless pay-per-use robotaxi service in San Francisco, Los Angeles, and Phoenix. Meanwhile, GM’s Cruise has yet to return to public roads after an incident in October 2023 involving a pedestrian, although efforts are underway to reintroduce the service in Phoenix. Also, Elon Musk, CEO of Tesla, has shaken up his company by laying off thousands of employees and increasing investment in artificial intelligence, with the scope of “going all-in on autonomy” and rolling out a robotaxi in August.