Hyundai to Invest $1B Into Self-Driving Company

South Korean automaker Hyundai Motor Group has agreed to pump nearly $1 billion into self-driving company Motional.

The investment was initially revealed by automotive parts supplier Aptiv in its Q1 earnings report. Aptiv has been a joint venture partner in Motional with Hyundai, but earlier this year said it was no longer prepared to commit money to the enterprise.

The Hyundai Group’s new investment will see it acquire 11% of Motional’s common equity held by Aptiv for $448 million. 

The cash injection will come from different companies across the group, with the Hyundai brand contributing the most, followed by Kia and then parts supplier Hyundai Mobis.

The group will also fund Motional with an additional $475 million, with the investment again split between Hyundai, Kia and Hyundai Mobis.

These deals are set to reduce Aptiv’s common equity interest from 50% to around 15%. And moving forward, Aptiv will not be required to fund Motional.

After the investment was revealed on Activ’s earnings call, it was subsequently confirmed by the automaker in a statement to South Korean media.

“Hyundai Motor Group decided to obtain stable management rights in Motional to proactively develop autonomous driving technology and internalize core technology,” it read.

Related:Hyundai Self-Driving Taxi Company Takes Hit as Key Backer Pulls Out

Motional was initially formed in 2020 as a $4 billion joint venture between Aptiv and the Hyundai Motor Group. 

Following Aptiv’s decision in February to reduce its interest in Motional, it was obvious that new funding would be required to keep the company moving forward with its development and rollout of self-driving taxis. 

While the new investment allows that – and means the Hyundai Motor Group is now a majority stakeholder in the Boston-based company – what is less clear is whether additional investment from elsewhere is required, or being actively sought.

Motional’s autonomous taxis, which are based on Hyundai’s Ioniq 5 model, have become a familiar sight in Las Vegas over the past couple of years, where they operate with safety drivers. The vehicles are available via familiar ride-hailing giants such as Uber and Lyft.

Ambitious plans for the future have also been revealed, including the building of production versions of the Ioniq 5 self-driving taxi at a facility in Singapore and a new robotaxi to be developed alongside Kia. 

The Hyundai Group’s immediate priority is likely to be to speed up development of the autonomous tech and create more synergies with its companies’ own self-driving efforts, in the hope of establishing a swifter path to commercialization for Motional and a return on its investment.

Related:Hyundai’s Robotaxi Coming in 2023