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AV tech consolidation continues

Euisun Chung, executive vice chairman of Hyundai Motor Group and Kevin Clark, president and CEO of Aptiv.
Euisun Chung, executive vice chairman of Hyundai Motor Group and Kevin Clark, president and CEO of Aptiv. Photo: Courtesy of Hyundai

Hyundai Motor Group and Aptiv are forming a $4 billion joint venture to produce self-driving technology, the latest in a string of alliances between automakers and AV tech companies.

The big picture: Developing self-driving cars is more difficult than many companies expected. Faced with a slowing global economy and mounting regulatory pressures, many players are teaming up to share the technology and financial burdens of AVs.

What's happening: Aptiv and Hyundai Group (which includes Hyundai, Kia and the Hyundai Mobis auto parts-making unit) will each own 50% of the joint venture.

  • Hyundai will invest $1.6 billion in cash and contribute $400 million in R&D resources.
  • Aptiv will transfer its autonomous driving technology, intellectual property and about 700 engineers to the new company.
  • Karl Iagnemma, president of Aptiv autonomous mobility, will lead the joint venture, to be based in Boston.
  • They plan to begin testing fully driverless systems in 2020 and have a self-driving platform available for robotaxi providers, fleet operators and automakers in 2022, senior executives told Reuters.

The intrigue: Hyundai's $2 billion tie-up with Aptiv raises questions about its commitment to Aurora Innovation, another AV tech firm in which it owns a stake.

  • Aurora recently ended a multi-year partnership with Volkswagen, which instead invested in Argo AI.
  • A Hyundai spokesperson emails that the company will continue to work with various partners on AV technology, including Aurora.
  • An Aurora spokeswoman confirmed that its partnerships with Hyundai and Fiat Chrysler Automobiles, among others, are not exclusive.
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