Hyundai Invests $1 Billion in full self driving
Hyundai and Kia are going to invest well over $60 billion over the next five years on electric vehicles and on autonomous driving, full self-driving.
Now, Hyundai and Kia, they’re investing well over $60 billion.
Global Expansion Strategy
They’re building new EV factories in US, new factories, and massive amounts are being spent on development of EV technology and full self-driving technology in South Korea, but also in many other places as well.
Primarily with this spending, most of the spending will be in the United States and South Korea.
Hyundai famously have lost a few billion dollars on a factory that they built in China, which is now sitting vacant.
Challenges in the Chinese Market
China has been a bit of a sad story for Hyundai and Kia. It just hasn’t worked out. So they are focused They’re focusing on heavily on Europe and the United States.
And they’re also focusing on building EVs in China, which they don’t sell there.
They will sell them outside of China using lithium-ion phosphate batteries, which are obviously very, very affordable.
That’s one way the company plans on selling cheap, affordable EVs to consumers globally.
Hyundai Investment in Autonomous Driving
Hyundai, though, are investing around $1 billion to develop self-driving technology through Motional, an autonomous driving startup.
Hyundai Motor Group decided to obtain stable management rights in Mosional to proactively develop autonomous driving technology and internalize core technology, said the South Korean automaker.
So they’re obviously seeing what Tesla are doing, what Xpung are doing, what other automakers are doing with full self-driving, and they decided there is no question they have to make this work.
And it’s a big priority now for Hyundai and Kia. Hyundai and Aptiv, an Irish-American automotive company, established Motional in March 2020.
Hyundai’s Stake in Motional
Hyundai will spend 500 million in capital increase and an additional $456,000 to acquire 11% of April’s share in Motional.
After its investment, the South Korean automaker will have a total share of 67% in the company.
The additional investment is expected to enhance Motional’s technological competitiveness by establishing the direction of technology development and lay the groundwork for expanding synergy between autonomous driving units within Hyundai and Kia Motor Group, said the Asian automaker.
Assessment of Motional’s Performance
In January 2024, Active announced that it would stop allocating capital to Motional and find ways to reduce its ownership share because the self-driving startup has incurred massive operating losses over the past three years.
They don’t believe the technology that they’ve developed so far is good enough to compete with companies such as Tesla.
According to business reports from Hyundai Motor Group’s affiliates, most of those operating losses have amounted to $1.5 billion.
Demonstration of Self-Driving Technology
Now, of course, Hyundai own a percentage of this company, a big percentage. So they’ve had to cop a lot of those losses themselves.
In March, Motional demonstrated its self-driving technology in the United States with the Hyundai Onyx 5 Robotaxi, and it was quite impressive.
Motional self-driving tech passed a typical United States driver’s license test with the Onyx 5.
So if Hyundai are actually able to roll this technology out on their existing vehicles, it would be amazing.
However, the key is this, can they do this affordably? For example, while Hyundai’s robot taxi looks extremely impressive, and it is.
It’s a very expensive vehicle, and decreasing costs is the big challenge here.
How does Hyundai decrease the cost of the LIDARs and the other equipment on this vehicle, and then equip them into a vehicle which they can afford affordably manufacture.
It would be hard if they were having to, say, manufacture these at a cost of $100,000 or $150,000 each in order to make this a sustainable, viable business.
They need to be able to do it in a way that XPlanet, Tesla, and other companies are doing by actually integrating this technology into an affordably priced vehicle.
Can that be done that’s what Hyundai and Kia aim to do over the next few years. They’ll invest a lot of money into this company. They hope that all of that will pay off.