The plan, which Hyundai said encompasses autonomous, connected and electric cars as well as technology for ride-sharing, comes after the automaker and two of its affiliates announced 4 weeks ago an investment of $1.6 billion in a venture with U.S. self-driving tech firm Aptiv (APTV.N)
South Korea’s government is also onboard, and intends to spend 1.7 trillion won between 2021 and 2027 on self-driving technology. It expects Hyundai to launch level 4, or fully autonomous, cars for fleet customers in 2024 and for the general public by 2027, an industry ministry official told Reuters.
“Hyundai has to buy technology from someone else because it lacks software technology. Even though it has a lot of cash, this could become a financial burden if its earnings deteriorate,” Esther Yim, an analyst at Samsung Securities, said.
Other analysts noted that the prospects for self-driving cars are quite murky.
Heading up the new joint venture will be Karl Iagnemma, the president of Aptiv’s Autonomous Mobility group, and it’ll be headquartered in Boston and supported by additional technology centers in multiple locations in the U.S. and Asia.
Both companies have been demonstrating autonomous vehicle technologies for multiple years now, and Aptiv has been working with Lyft in Las Vegas on a public trial of autonomous robotaxi services since debuting the capabilities at CES in 2018. Aptiv’s Vegas pilot uses BMW 5 Series cars for its autonomous pickup fleet.
This joint venture should help them with bringing the technology to market with the scale of a global automaker, while Hyundai gains by being able to shore up its own work in self-driving with a partner that has invested in developing these solutions as a primary concern over many years.