/Hyundai Makes Another Match in the Self-Driving Game

Hyundai Makes Another Match in the Self-Driving Game

After years of watching its competitors launch efforts to take self-driving technology and turn it from a lofty research project into an actual revenue stream, Hyundai has placed a hefty bet that it can deliver its own robotaxi. The Korean automaker announced Monday it is spending $2 billion to form a joint venture with an industry supplier called Aptiv. Together, the companies aim to produce a production-ready, fully self-driving car fit for use as a ride-hail vehicle by 2022.

Each company will own a 50 percent stake in the venture, with an equal number of board members. Karl Iagnemma, who runs Aptiv’s autonomy efforts, will be CEO. Aptiv’s 700-plus employees, spread between Boston, Pittsburgh, and Singapore, will do the sensing and software work that makes the car drive itself, while up to 100 Hyundai engineers in Seoul will create the vehicle itself. Aptiv will match Hyundai’s investment—more than three-quarters of which the automaker will deliver in one cash payment—giving the effort $4 billion to play with.

None of those details are surprising, because Hyundai and Aptiv are following what has become a standard approach to delivering robotaxis: Combine a relatively small software-focused developer with a massive automaker. Ford and Volkswagen have invested billions in Argo. Waymo has Fiat Chrysler and Jaguar Land Rover building its sensors and tech into minivans and SUVs. GM acquired Cruise, but let the startup retain much of its autonomy. Putting aside efforts focused on delivering goods (like Nuro) or making aftermarket systems for trucks (like Kodiak), the only big developer that hasn’t announced a partnership with an automaker is Zoox.

The companies that have shacked up implicitly recognize twin truths: legacy automakers aren’t positioned to master the complexity of self-driving software with in-house R&D teams, and AV-focused companies can’t build cars that can withstand the rigors of the automotive certification process, as well as life on the street. Hyundai may not make the most advanced or most powerful cars, but it builds 5 million vehicles a year, and it (with sister company Kia and its luxury brand Genesis) topped the most recent JD Power rankings for initial quality. “They bring vehicle capability that in reality only an [original equipment manufacturer] can bring,” says Aptiv CEO Kevin Clark. “We see it as one plus one equals four.”

Aptiv is little known in this budding industry, but it’s no newcomer. It has been working on active safety tech like adaptive cruise control and lane keeping for more than two decades, and in 2015, it sent its autonomous tech on a 3,400-mile journey across the US. It changed its name from Delphi Automotive after selling off its powertrain business in 2017, and that same year it spent $400 million to acquire Nutonomy, the MIT-spinoff run by Iagnemma, who has been researching robotics and autonomous driving since the late 1990s. Today, Aptiv runs a pilot program with Lyft in Las Vegas, putting riders into its self-driving cars (with human backups behind the wheel).

Aptiv doesn’t intend to run a self-driving service using Hyundai-built cars, Clark says. “We have no interest in providing mobility as a service.” It just wants to put these vehicles on the market and build enough for anybody who wants to deploy them.

This new deal raises questions about the limited work Hyundai has done on this front. In early 2018, the automaker started working with Aurora, the self-driving startup run by Google veteran Chris Urmson. An Aurora spokesperson says that work is ongoing, and Hyundai invested in the outfit in June. A Hyundai spokesperson says the automaker will continue to work with various partners. And there’s no reason it shouldn’t: The self-driving car demands relationships, but not monogamy.

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