Participation in Paid-in Capital Increase Still Undecided
Possibility of Increased Influence and Collaboration After Capital Increase
May Take a Breather Like GM and Others
U.S. autonomous driving technology company Aptiv has decided not to participate in the capital increase of Motional, a company established together with Hyundai Motor Group, drawing attention to Hyundai Motor's next moves.
According to major foreign media reports on the 2nd, Kevin Clark, CEO of Aptiv, recently announced the fourth-quarter results of last year and said, "Although Motional continues to make progress, we (Aptiv) have decided not to invest further in Motional and are looking for alternatives to reduce our stake."
Motional is a company established in 2020 with $2 billion each invested by Hyundai Motor Group and Aptiv. It develops unmanned autonomous driving technology to be used for ride-hailing and delivery, and has introduced commercial robotaxis in some regions. Its net loss in 2022 was about 750 billion KRW.
Additional investment or capital increase issues regarding Motional have surfaced since last year. There are many places to invest, but the current business is not only unprofitable but also incurring losses. Aptiv's move to step back appears to be because the cost burden is significant and it negatively affects the company's financial performance. CEO Clark said, "The cost of providing technology is a difficult issue in the on-demand mobility market."
Attention is focused on Hyundai Motor Group. It has not yet decided whether to participate in the capital increase. Internally, there are only talks that each affiliate holding shares will make its own judgment, but no official decision has been made.
Since there are affiliates within Hyundai Motor Group that research autonomous driving technology separately, there is a possibility of increasing influence and collaboration after the capital increase. Conversely, it could also take a breather similar to other automakers.
Earlier, automakers such as General Motors (GM), Ford, and Volkswagen have reduced or completely stopped their autonomous driving businesses, which are considered core technologies for future mobility. GM announced on the 30th of last month that it would reduce spending on its robotaxi subsidiary Cruise by about $1 billion (approximately 1.33 trillion KRW), half of last year's level.
Ford and Volkswagen also withdrew investments in Argo AI, an autonomous driving startup they jointly established, citing difficulties in technology development. At one point, even Amazon, the world's largest e-commerce company, was discussed as a potential participant in Argo, but it ultimately did not materialize. Initially, some big tech companies such as Microsoft, Apple, and Meta showed interest in autonomous driving, but only Google (Waymo) has consistently maintained its involvement so far.
Tesla, considered the most advanced among automakers, has introduced low-level driver assistance technologies in the autonomous driving stage and applied them to mass-produced vehicles. As it has declared for years, it also announced plans to introduce vehicles supporting robotaxis this year, but the industry views the realization of this as uncertain.
The trend of aggressively investing in autonomous driving technology has changed due to shifts in the market environment. While profitability centered on automakers was good over the past 2-3 years, it has worsened since last year due to rising labor costs and economic recession. Since electrification, which can immediately meet carbon emission regulations, is more urgent than autonomous driving with uncertain outcomes, investment priorities have been adjusted accordingly. Autonomous driving is not simply completed by refining technology levels; various conditions such as related regulations, social awareness, and transportation infrastructure must be established together, so it is expected to be challenging for widespread practical use.
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