Aptiv to cut stake in Motional, self-driving JV with Hyundai

Aptiv PLC, a US autonomous driving technology company, has decided to reduce a significant portion of its stake in Motional, a self-driving technology joint venture with Hyundai Motor Group and will not inject additional capital into the loss-making venture, according to foreign media reports on Wednesday.

“While our Motional joint venture continues to make progress on their technology roadmap, we’ve decided to no longer allocate capital to Motional and are pursuing alternatives to further reduce our ownership interest,” TechCrunch quoted Aptiv Chairman and Chief Executive Kevin Clark as saying.

“The costs related to delivering the tech principally, in and around hardware, really makes it challenging from an adoption standpoint in the mobility on-demand market,” he told a fourth-quarter earnings call.

Aptiv and Hyundai each injected $2 billion in Motional to establish the 50:50 venture in 2020.

Motional operates an autonomous vehicle taxi service in Las Vegas on ride-hailing platforms such as Uber, Lyft and Via, with human operators behind the wheel.

However, Motional postponed the launch of a commercial service of the IONIQ 5 robotaxi in the US from the end of 2023 to 2024. Hyundai Motor’s IONIQ 5 is an all-electric midsize crossover SUV.

Aptiv Chief Financial Officer Joe Massaro said the company is exploring steps to reduce a significant portion of its stake in Motional, but the exact timing of the stake reduction is not yet known, according to TechCrunch. 

The company had originally planned to begin paid operations of Level 4 autonomous driving robotaxis in Las Vegas, Nevada in December 2023. In Level 4, the car can handle the majority of driving situations independently, monitored by a human driver.

It remains uncertain when the self-driving robotaxi will hit the road.

CAPITAL RAISING

With 1 trillion won ($750 million) in deficit, Motional is understood to have requested an additional capital injection from Aptiv and Hyundai Motor Group in the first half of this year.

Now that Aptiv decided to stop funding the JV, Hyundai Motor Group may need more time before deciding on whether to accept Motional's request for an additional capital injection.

Hyundai Motor Group’s three units – Hyundai Motor Co., Kia Corp. and Hyundai Mobis Co. – together own a 50% stake in Motional.

“We’ll decide after Hyundai Motor, Kia and (Hyundai) Mobis independently review it,” a Hyundai Motor Group official told The Korea Economic Daily, about Motional’s capital raising proposal.

WAY TO GO

Industry observers said autonomous driving is the “way to go” down the road.

However, Aptiv’s announcement indicated the challenges facing the driverless vehicle industry, which is losing steam in the wake of accumulated losses and continuous delays in its commercial service launch.
   

General Motors' (GM) self-driving company Cruise LLC has suspended its driverless robotaxi service.

GM on Wednesday said that it will reduce Cruise’s expenses by $1 billion in 2024 after the robotaxi operator faced two federal probes over a crash in San Francisco in October last year, according to the Washington Post.

Cruise lost a combined $6.7 billion in 2022 and 2023. Ford and Volkswagen shut down Argo AI, their autonomous vehicle joint venture, in 2022.

Apple Inc. has continued to push back the launch of Apple Car, an autonomous driving EV. Last month, it downgraded its self-driving features to Level 2 from Level 4, underscoring the difficulty in realizing fully autonomous driving.

Write to Nan-Sae Bin at binthere@hankyung.com
 


Yeonhee Kim edited this article.