Hyundai Invests Nearly $1 Billion in Self-Driving Startup Motional

Hyundai is set to inject close to $1 billion into Motional, a significant investment that will grant the automaker a majority stake in the self-driving startup while bolstering Motional’s financial footing.

The Korean automaker has committed $475 million directly into Motional as part of a comprehensive agreement that also involves acquiring joint venture partner Aptiv. In addition to this direct investment, Hyundai will allocate an additional $448 million to acquire an 11% stake in Aptiv’s common equity interest in Motional. These details were disclosed in Aptiv’s first-quarter earnings report released on Thursday.

According to Aptiv, the reduction in its common equity interest in Motional from 50% to approximately 15% will leave Hyundai with an 85% controlling stake. This move aligns with Aptiv’s earlier indication, as flagged by Chairman and CEO Kevin Clark in January, that the company would scale back its ownership interest in Motional due to the significant costs associated with commercializing a robotaxi business and the challenging path to profitability.

In light of these developments, Aptiv has revised its full-year net sales forecast for 2024 downward to a range of $20.85 billion to $21.45 billion, compared to the previous projection of $21.3 billion to $21.9 billion.

While Motional confirmed the infusion of new capital and Hyundai’s increased stake, it did not verify Aptiv’s financial figures. However, Hyundai has affirmed the accuracy of the amounts reported in Aptiv’s earnings report.

Motional traces its origins back to nuTonomy, an autonomous vehicle startup based in Boston, which Delphi acquired for $450 million in 2013. Following Delphi’s subsequent restructuring, the Aptiv unit absorbed nuTonomy, leading to the formation of Motional through a $4 billion joint venture with Hyundai in 2019. Although Aptiv’s recent strategic moves reflect a cautious approach to risk management and financial optimization, Hyundai’s expanded involvement underscores its confidence in Motional’s prospects.

Amid reports of Motional securing a bridge loan as interim financing while arranging long-term funding, questions linger about the startup’s future funding needs and potential partnerships. Motional has been conducting autonomous vehicle tests with safety drivers in several cities, including Boston, Pittsburgh, Las Vegas, Los Angeles, and Singapore. Its roadmap includes a goal to launch a robotaxi service utilizing driverless Hyundai Ioniq 5 vehicles by 2024, with plans to collaborate with ride-hail platforms such as Uber, Lyft, and Via to offer customers autonomous rides.