Hyundai is making a major financial investment in Autonomous Vehicle (AV) company Motional. The staggering 1 billion dollars is split between $475 million of direct backing and a further $448 million to acquire an 11% stake in the start-up equity of Aptiv. This investment is rooted in Hyundai’s faith in Motional’s potential and the inherent value of Aptiv’s start-up equity.
Motional was co-founded by Hyundai and Aptiv in 2019, with an initial valuation of a whopping $4 billion. The company aims to launch a driverless taxi service by 2024 using Hyundai’s futuristic fully electric Ioniq 5 cars. The project’s conception was driven by a need to push technological boundaries while also advocating for environmental sustainability through electric cars.
The end of 2021 saw an exciting announcement from Hyundai and Aptiv about developing ready-for-production Ioniq 5 robotaxi prototypes.
Hyundai’s billion-dollar bet on driverless taxis
These prototypes are designed to function with Level 4 autonomy, which in most scenarios negates the need for a human driver. Thus, L4 autonomy reduces instances of human error in traffic situations and enhances road safety.
However, the road to Motional’s success wasn’t always smooth. Aptiv’s chairman and CEO, Kevin Clark, stepped back from further funding and injected uncertainty into Motional’s future. The main contributing factors to this decision were the significant costs associated with launching a driverless taxi business and the considerable time it took to become profitable.
In response to these challenges, Hyundai decided to fund Motional directly. This was a strategic and tactical move to ensure the company’s survival and eventual success. However, the results of this decision are linked to how Motional manages its financing and remains dedicated to its vision for a driverless taxi service.
In other related news, the CEO of Tesla, Elon Musk, has disbanded the company’s Supercharger team. Causing uncertainty around severance packages for the now redundant team members and potential disruption to the company’s operations as they open their charging services to other electric vehicles.
