US autonomous driving technology company Aptiv said it planned to cut its shareholding in the Motional joint venture with Hyundai Motor Group to reset its capital investment priorities and future growth strategy, according to media reports.
Motional was established in 2020 as a 50:50 joint venture focused on the development of autonomous driving technology with each partner investing US$2bn. The company’s mission was to make “driverless vehicles a safe, reliable and accessible reality”.
Aptiv, based in Ireland, said it would not inject any further capital into the loss making joint venture after the company postponed the launch of a commercial robotaxi service based on the Hyundai Ioniq 5 battery electric vehicle (BEV). The company had originally planned to launch a commercial Level 4 autonomous robotaxi operation in Las Vegas at the end of last year and it remained unclear when the technology would be commercialised.
According to reports, Motional has a $750m funding shortfall and has requested its shareholders inject further capital into the company in the first half of this year.
Aptiv chairman and CEO, Kevin Clark, said during the company’s fourth quarter earnings call: “While our joint venture continues to make progress, we’ve decided to no longer allocate capital to Motional and are pursuing alternatives to further reduce our ownership interest”.
He added: “The costs related to delivering the technology, principally in and around hardware, make it really challenging from an adoption standpoint in the mobility on-demand market.”
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CFO Joe Massaro also said the company was looking at options to significantly reduce its stake in Motional.
It remained uncertain when the self-driving robotaxi would hit the road.
With KRW1 trillion ($750m) in deficit, Motional was 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.
“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.