Hyundai Motor Group will invest 1.29 trillion won ($946 million) in Motional, a US-based autonomous driving startup, to boost technological development and secure stable control of the startup, the Korean auto conglomerate said Friday.
Hyundai Motor will spend 663 billion won in capital increase and another 620 billion won for acquiring Aptiv’s 11 percent share in Motional, bringing the auto giant’s total share to 66.8 percent.
The auto giant’s three affiliates -- Hyundai Motor, Kia and Hyundai Mobis -- will take part in the capital increase. They will spend 665 billion won, 361 billion won and 257 billion won, respectively.
The transactions are expected to be completed by the third quarter of this year, according to Aptiv’s first-quarter earnings report.
Hyundai Motor and Aptiv, an Irish-American automotive technology company, each invested $2 billion to establish Motional as an equal joint venture in March 2020. Motional has focused on developing and commercializing Level 4 high automation, which means practically self-driving vehicles.
“(The additional investment) is expected to enhance Motional’s technological competitiveness by establishing the direction of technology development and lay the groundwork for expanding synergy between autonomous driving units within (Hyundai Motor Group),” said a Hyundai Motor official.
Motional, however, continues to turn in losses as the development of autonomous driving technology has yet to find a commercial breakthrough. According to the business reports of Hyundai Motor Group’s affiliates, the startup’s accumulated operating losses have amounted to about 2 trillion won over the last three years.
Aptiv previously announced during its fourth-quarter earnings conference in January that it would no longer allocate capital to Motional and that it would pursue alternatives to cut down its ownership share, as the autonomous driving startup has continued to bleed.
The latest disclosed information on Motional’s level of technology is that it could pass a US driver’s license test, as Hyundai Motor released a campaign film showing the all-electric, self-driving Ioniq 5 robotaxi passing a simulated testing process in March. The video showed the Ioniq 5 robotaxi smoothly navigating the Las Vegas Strip and the city’s suburban areas.
“Hyundai Motor’s additional investment in Motional shows its commitment to autonomous driving technology at a time when the short-term future of self-driving vehicles is not looking so bright,” said an auto industry analyst at a local securities firm.
“But having a majority stake in Motional will allow Hyundai Motor to make decisions faster and change directions quickly. Although questions will remain until (Hyundai Motor) can show tangible results, the company is unshaken by the additional financial spending because its main business of selling cars is going well.”
