In a strategic move, Hyundai is set to invest close to $1 billion in Motional, a self-driving car startup. This substantial financial commitment will not only cement Hyundai’s majority ownership but also ensure Motional’s continued operation and expansion.
Specifically, the South Korean automotive giant is directly injecting $475 million into Motional. This move is part of a larger agreement that also includes Hyundai acquiring a stake from its former joint venture partner, Aptiv. Subsequently, Hyundai will purchase an additional $448 million, translating to 11% of Aptiv’s common equity in Motional.
A disclosure from Aptiv’s first-quarter earnings report indicates that its stake in Motional will be scaled back from 50% to approximately 15%, leaving Hyundai with an 85% majority share. Earlier this year, Aptiv’s leadership expressed intentions to reduce their investment in Motional, citing the extensive costs and prolonged timeline associated with commercializing autonomous taxi services and achieving profitability.
In light of these developments, Aptiv has revised its revenue projections for 2024, now forecasting net sales in the range of $20.85 billion to $21.45 billion, a decrease from the previously estimated $21.3 billion to $21.9 billion.
While Motional has acknowledged the new funding and Hyundai’s increased stake, neither company has officially confirmed the financial details reported by Aptiv.
Motional’s origins trace back to a Boston-based autonomous vehicle venture, nuTonomy, which was acquired by Delphi for $400 million. Post-acquisition, nuTonomy became part of the Aptiv division and subsequently evolved into Motional through a $4 billion joint venture between Hyundai and Aptiv in 2019. With Aptiv reducing its involvement, Hyundai’s enhanced role raises questions about Motional’s trajectory.
Previously, it was reported that Motional secured a bridge loan to sustain operations while seeking long-term financing. Hyundai’s latest funding is likely to serve this purpose, yet it remains unclear if Motional will seek additional investors moving forward.
Motional has been conducting autonomous vehicle tests with safety drivers in various cities, and through partnerships with ride-hailing services like Uber, Lyft, and Via, aims to launch a driverless taxi service using Hyundai Ioniq 5 vehicles in 2024.
Moreover, Motional and Hyundai have announced collaborative efforts to develop production-ready Ioniq 5 robotaxis and have also shared plans to partner with Kia on a next-generation autonomous vehicle.
The financial restructuring at Motional aligns with the broader robotaxi industry’s challenges. The startup has yet to commence charging for its pilot services, while competitors like Waymo and GM’s Cruise are making strides in their respective markets. Tesla, too, is making waves in the sector, with CEO Elon Musk prioritizing AI investments to achieve autonomous driving goals.
