Hyundai is investing nearly USD 1 billion in a Hyundai-Aptiv autonomous vehicle joint venture, Motional, gaining a majority stake and providing the startup with capital for continued operations. The deal involves a direct investment of USD 475 million and purchasing additional equity for USD 448 million from its partner, Aptiv (11% stake), resulting in Hyundai controlling 85% of Motional.

Aptiv, which previously held a 50% stake in Motional, is reducing its investment. It cites the high costs and long timeframe associated with commercializing robotaxis.

The deal is expected to be completed by Q3 2024, subject to customary regulatory approvals and closing conditions.

Analyst QuickTake: Motional, resulting from a USD 4 billion collaboration between Hyundai and Aptiv, is working on commercializing autonomous taxis by 2024. However, the funding situation for Motional became uncertain as Aptiv decided to cut stake and discontinue future funding in January 2024, leaving Hyundai as the primary backer unless Motional attracted additional investors. We believe the new funds injected by Hyundai would help the company’s continued operations. Motional also secured a bridge loan to meet temporary financial needs in March 2024. The broader robotaxi industry is marked by uncertainty and gradual progress toward commercial viability, with incumbents like Alphabet’s Waymo expanding its services and others like GM’s Cruise recovering from setbacks.