Motional expects profit structure improved by 2025

Motional, the US-based self-driving joint venture of South Korea's Hyundai Motor Group, said it expects Motional's profit structure to improve by 2025, a bold declaration of profitability at a time when global manufacturers of self-driving vehicles are closing or suffering from falling stock value due to failure to find profitable business models.

Industry sources on Monday said Motional, formed in 2020 between the conglomerate and the Irish-American self-driving technology company Aptiv, said this in a recent conference with 14 domestic stock analysts and credit rating agencies.

Motional's operating losses jumped from 516.2 billion won ($381 million) last year to 870 billion won in the first three quarters of this year. Yet its operating costs have kept falling and rising demand is expected to lead to economies of scale.

Motional is expanding its market after announcing on Thursday its launch of operations of the unmanned self-driving cab robotaxi in Los Angeles, following that in Las Vegas. It has also teamed up with the ride-hailing company Lyft to allow robotaxi riders to get to their destinations through an app.

Motional said the expansion of robotaxis, sales of self-driving systems and delivery of such systems will boost revenue from next year, predicting stable business through confirmation of technological development and financing plans by 2024. A major advantage of the company is that no defects in over 100,000 trips by its self-driving vehicles have been found in the US.

The liquidation last month of Argo AI, a self-driving technology company that received $3.6 billion in investment from Ford and Volkswagen, has left Motional, Google's Waymo and General Motors' Cruise as the top three players in the robotaxi sector. Argo AI's superior technology fueled the company's status as an industry leader but it eventually failed due to lack of profitability.

Motional said, "Thanks to our lidar and radar, our safety standards are higher than those of Tesla's camera sensor."

Write to Hyung-Kyu Kim at khk@hankyung.com