4 months ago
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Motional, the autonomous vehicle startup borne out of a $4 billion joint venture between Hyundai and automotive supplier Aptiv, will pause its commercial operations and delay plans to launch a driverless service as it undergoes a restructuring, TechCrunch has learned. The aim is make progress on technology and the business model, while preserving capital, according to sources familiar with the changes.
The company told employees Tuesday during an all-hands meeting that the changes will include layoffs, but did not provide a figure of how many people would be affected, according to sources who spoke to TechCrunch on condition of anonymity. Motional is ending its entire commercial operation, which today includes robotaxi rides with a human safety driver behind the wheel, in Las Vegas and Santa Monica, Calif. Instead, the company is put greater resources towards testing, which will likely include an expansion to other cities, one source familiar told TechCrunch.
Employees were told that the stubbornly high cost of running a commercial operations coupled with pricey autonomous vehicle technology components makes the business case challenging today. Motional also posted a blog post shortly after the meeting ended that outlines its plans.
The restructuring comes less than a week after Hyundai Motor Group invested nearly $1 billion in Motional as part of a broader deal that included buying out a portion of joint venture partner Aptiv. About half of that amount, $475 million, is going directly into Motional’s coffers. The remaining $448 million was used to buy buy 11% of Aptiv’s common equity interest in Motional.
Hyundai’s new investment puts Motional’s valuation at $4.1 billion, according to sources on the call. That’s about the same valuation as Motional had in 2020.
Earlier this year, Motional’s future was put in doubt after Aptiv announced plans to reduce its ownership interest and stop allocating capital to the venture due to the high cost of commercializing a robotaxi business and the long road ahead to profits. Aptiv expects to reduce its common equity interest in Motional from 50% as of March 31 to about 15%, leaving Hyundai with the remaining 85% control.
