Hyundai has agreed to spend nearly $1 billion in Motional, an investment that will give the automaker a majority stake while also giving the self-driving startup the capital it needs to continue operations.
The Korean automaker invested $475 million directly in Motional as part of a broader deal that also includes purchasing joint venture partner Aptiv. As part of the deal, Hyundai will spend an additional $448 million to acquire 11% of Aptiv’s common equity stake in Motional, according to information disclosed in Aptiv’s first-quarter earnings report on Thursday.
Aptiv also said it expects to reduce its common equity stake in Motional to about 15% from 50% as of March 31, leaving Hyundai retaining the remaining 85% control. Aptiv Chairman and CEO Kevin Clark announced in January that the company would reduce its stake in Motional. The company announced at the time that it would no longer provide capital to Motional due to the high cost of commercializing a robotaxi business and the long road to profitability.
Aptiv on Thursday lowered its full-year 2024 net sales forecast to $20.85 billion to $21.45 billion from $21.3 billion to $21.9 billion.
Motional confirmed the new round of financing and increased Hyundai’s stake. The company did not respond to TechCrunch’s inquiry about the accuracy of Aptiv’s numbers. Hyundai also could not be reached for confirmation.
Photo credit: Aptiv Investor Relations
Motional launched in 2013 as Boston-based autonomous vehicle startup nuTonomy before being acquired by Delphi for $400 million. Delphi later split its business, with Aptiv unit acquiring nuTonomy. The company became Motional in 2019 as part of a $4 billion joint venture between Hyundai and Aptiv. While it’s clear from Aptiv’s earnings report that the company is trying to manage risks and optimize finances in the face of a less positive outlook, the company’s retreat and Hyundai’s move forward raise positive questions about Motional’s future.
In March, TechCrunch reported that Motional had secured a bridge loan for an undisclosed amount as a lifeline, while the AV startup secured its next round of longer-term funding. While it’s likely that this funding round from Hyundai meets those needs, Motional hasn’t responded to TechCrunch’s request for more information about whether the company needs to acquire additional investors in the future.
Motional has tested its autonomous vehicles with a safety driver behind the wheel in Boston, Pittsburgh, Las Vegas, Los Angeles and Singapore. The company’s go-to-market strategy includes working with existing ride-hail platforms such as Uber, Lyft and Via to offer ride-sharing services to customers. Motional has stated its goal to launch a robotaxi service using driverless Hyundai Ioniq 5 vehicles in 2024.
Motional and Hyundai announced plans in November 2023 to jointly develop production-ready versions of the Ioniq 5 all-electric robot taxi at the automaker’s new innovation center in Singapore, the Hyundai Motor Group Innovation Center Singapore (HMGICS). During CES 2024, Motional also announced plans to work with Kia on a next-generation vehicle that will enter commercial operation later this decade, with initial development phases beginning later this year.
Motional’s financial changes come as the robotaxi industry continues to face uncertainty. The startup slowly moved towards commercialization, launching pilot projects in at least five cities. Crucially, Motional has not yet started charging for rides or deliveries. Meanwhile, Waymo continues to expand its fully driverless paid robotaxi service in San Francisco, Los Angeles and Phoenix, with plans to reach Austin later this year. GM Cruise is still mostly off the road after an incident in October 2023 in which a pedestrian became stuck under and swept away by one of its robot taxis, but the company has returned to public roads in Phoenix as part of a slow, deliberate reintroduction started mapping.
Then there is Tesla. CEO Elon Musk has transformed his company, laying off thousands and increasing investment in AI, with a stated goal of “doing everything for autonomy” and delivering a robotaxi in August.