Hyundai Contributes $1 Billion to Motional, an AV Startup

Hyundai Contributes $1 Billion to Motional, an AV Startup

Hyundai plans to spend nearly $1 billion in Motional, gaining control of the self-driving firm and providing much-needed funding for its continuous operations.

With the goal of launching a driverless robotaxi service with Hyundai Ioniq 5 vehicles in 2024, Motional has committed substantial resources over a long period of time to developing its autonomous vehicle technology. Aptiv seems to have realized its financial limitations as Motional and Hyundai got closer, as seen by intentions revealed in November to work together on production-ready versions of the electric Ioniq 5 robotaxi.

Hyundai’s $475 million direct investment in Motional is a component of a bigger deal that also includes Hyundai purchasing its joint venture partner Aptiv. Aptiv’s first-quarter results announcement on Thursday included specifics indicating Hyundai will also “purchase 11% of Aptiv’s common equity interest in Motional for $448 million.”

Aptiv has declared its intention to lower its 50% common stock position in Motional as of March 31 to around 15%, enabling Hyundai to maintain 85% majority control. Kevin Clark, the chairman and CEO of Aptiv, stated in January that the business planned to reduce its stake in Motional. Aptiv, meanwhile, announced that it would no longer be providing funding to Motional because of the high expenses involved in bringing a robotaxi company to market and the prolonged time required to turn a profit.

Aptiv reduced its early forecast of $21.3 billion to $21.9 billion for full-year net sales in 2024, bringing the total down to $20.85 billion to $21.45 billion as of Thursday.

Motional did not confirm the numbers provided by Aptiv, but it did admit the latest fundraising round and Hyundai’s increasing ownership. Hyundai, however, confirmed that the figures stated in Aptiv’s earnings report are accurate.

This Motional move comes at a time when the robotaxi industry is still rife with uncertainty. With the introduction of a completely driverless pay-per-use robotaxi service in San Francisco, Los Angeles, and Phoenix, Waymo, a Google company, leads in commercialization. In the meanwhile, attempts are being made to reestablish GM’s Cruise service in Phoenix, but the service has not yet returned to public roadways following an incident involving a pedestrian in October 2023. In addition, Tesla CEO Elon Musk has shook up his organization by raising investment in AI and cutting off hundreds of workers in an effort to “go all-in on autonomy” and launch a robotaxi in August.