Autonomous vehicle company Motional to lose key backer | Tech Crunch

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Autonomous vehicle company Motional is losing capital backing from one of its primary backers as it aims to commercialize a robotaxi service by 2024.

Automotive supplier Aptiv — the other half of the $4 billion joint venture with Hyundai that created Motional — said Wednesday it would no longer commit capital to the effort.

“As our Motional joint venture continues to progress their technology roadmap, we have decided to no longer commit capital to Motional and are pursuing alternatives to further reduce our ownership interest,” said Optiv Chairman and CEO Kevin Clarke in the company's fourth program. Quarterly earnings call on Wednesday.

“The costs associated with technical delivery, in and around the hardware, make it really challenging from an adoption perspective in the mobility on-demand market,” Clark said.

In other words, the robotaxi service is expensive to sustain, and the timeline to recoup those precious dollars is too long for Optiv.

Aptiv CFO Joe Massaro later added that “the company is exploring actions to reduce a significant portion of our joint equity while working on the structure of the joint venture agreement.” He said the exact timing of the reduction is yet to be known.

Motional, which operates an autonomous vehicle taxi service in Las Vegas (still with human safety operators) on the Uber, Lyft and Via platforms, downplayed Optiv's announcement in its quarterly earnings call.

“We are confident in our funding roadmap and are well positioned for the next phase of our commercialization,” reads an emailed statement from the company. “Our team is focused on scaling our driverless services, expanding Motional's commercial partnerships and developing Motional's next-generation robotaxi in collaboration with Kia. Aptiv and Hyundai Motor Group remain Motional shareholders and there are currently no ownership updates. Motional is set apart by our strategic partnerships with our stakeholders and we have their strong support and cooperation.

Sources of motion

Motional was not expressed at the Aptiv and Hyundai board meeting.

In 2013, Carl Iagnemma and Emilio Frazzoli founded nuTonomy, a Boston-based autonomous vehicle startup that was one of the first to successfully test the technology on public roads. Automotive parts supplier Delphi acquired nuTonomy in 2017 for $450 million. Delphi later split into two companies: its powertrain business became Delphi Technologies, while Optiv focuses on the design and production of electronic systems, advanced safety technology, and the hardware and software required for autonomous vehicles. nuTonomy has merged into Optiv.

Two years later, as the hype and promise of autonomous vehicles peaked, Hyundai and Optiv formed a joint venture to commercialize self-driving cars — later the Motional brand. Ignemma, who was president of Optiv's autonomous mobility group, has been tapped to head Motional.

At the time, the combined investment in the joint venture would be $4 billion in combined value, including combined engineering services, R&D and IP values. Aptiv agreed to bring its autonomous driving technology and about 700 employees, while Hyundai Motor Group said it would pay a combined $1.6 billion in cash from its sub-brands, vehicle engineering, R&D and access to its IP.

Its goal is to start testing its AVs in 2020 and commercialize the technology by 2022, which looks extreme now, but is in step with the rest of the nascent and bullish industry. Motional, along with the rest of the industry, adjusted its commercial goals.

And the company has made some progress towards its goal of launching a robotaxi service in 2024 using driverless Hyundai Ioniq 5 vehicles. In November, Hyundai Motor Group and Motional announced plans to co-develop production-ready versions of the all-electric Ioniq 5 robotaxi. At the automaker's new innovation center in Singapore, the Hyundai Motor Group Innovation Center Singapore (HMGICS). A production-ready autonomous vehicle that has the kind of redundancies designed for safe operations without a human driver is a critical milestone needed by commercial operations.

The company is testing its autonomous vehicles — always with human safety operators behind the wheel — in Boston, Pittsburgh, Las Vegas, Los Angeles and Singapore. It also operates an autonomous delivery service in Los Angeles with Uber Eats. During CES 2024, the company announced plans to work with Kia on a next-generation vehicle that will enter commercial operations later this decade. According to the company, the initial development process will begin this year.

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