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Hyundai Motor Co. and Aptiv’s joint self-driving car joint venture is pausing its operations, delaying commercialization plans, and laying off employees, according to the startup’s CEO.
The decision comes a week after Hyundai agreed to spend $900 million to keep the startup, Motional, afloat in return for a larger stake. After the purchase, the South Korean automaker will own about 85% of the venture. Aptiv and Hyundai each invested $2 billion investment to launch the startup in March 2020.
Motional CEO Karl Iagnemma on Tuesday said in a blog post that despite the startup’s success, large-scale deployment of driverless cars “will not happen overnight.”
Motional has introduced a Level 4 autonomous vehicle, the all-electric Ioniq 5 robotaxi, and completed more than 100,000 autonomous rides in Las Vegas and “thousands” of food deliveries in Los Angeles through its partnerships with Uber and Lyft. For comparison, Tesla’s Full Self-Driving and Autopilot technology is ranked as a Level 2 self-driving system, according to SAE International’s standards.
“Driverless vehicles will enter the market when the technology has evolved, and – just as importantly – when the business case for autonomous deployment is clear,” Iagnemma said. “While we’re excited by our pace of technical progress, and our initial commercial deployments have yielded valuable insights, large-scale deployment of AVs remains a goal for the future, not the present.”
The startup will now focus resources on developing its “core” driverless technology and reduce its efforts toward commercial developments. Motional has struggled to enhance testing of its cars, even as Google’s Waymo — a key rival — has expanded service across multiple metro areas and states.
Now, the firm will likely expand testing to cities beyond Boston, Pittsburgh, and Las Vegas, where it currently tests its technology, TechCrunch reports. The firm will also halt its taxis in Las Vegas through its partnerships with Uber and Lyft and push deployment of a commercial robotaxi service to 2026, two years later than planned.
Iagnemma said the new strategy includes the “streamlining of our teams” and a reduction in staff. It’s unclear how many workers will be affected by the restructuring, although a spokesperson said roles were impacted throughout the company’s locations and functions.
Motional’s delays come on the heels of British startup Wayve’s announcement of a $1.05 billion fundraising round lead by Softbank, Microsoft, and Nvidia . The London-based firm uses what it calls “embodied” artificial intelligence to interact with and learn from human behavior in real-world environments.