Aptiv, the leading automotive supplier that, together with Hyundai, formed the Motional robotaxi project, based on the previously acquired nuTonomy startup Aptiv, announced today that it will no longer provide additional capital to Motional and is seeking to sell part of its stake. so that Motional’s losses are not reflected in their accounts.
Motional has developed robotaxis, based on Hyundai platforms, and conducted live testing and operations with safety drivers in Las Vegas and other cities, with plans for live service in Miami. After Waymo, Cruise and Zoox, they were the main other US company expected to move towards a pilot robotaxi service without safety drivers. (Cruise has temporarily suspended this service, and Zoox has announced that it will open such a service this year.)
Motional was born from nuTonomy, a Singapore/MIT-based startup that was acquired for $450 million by Delphi. Delphi created Aptiv (including nuTonomy) to manage the electronics, ADAS, software and autonomy of its business. Over time, almost $4 billion has been invested.
Without Aptiv, Hyundai will have to support Motional alone. It will probably look for another partner to both buy Aptiv’s shares and invest further. Unfortunately, it’s unclear who that other partner will be, and it’s damning that no partner has been found before this announcement. Argo was closed by Ford without finding a buyer. Apple recently announced it had scaled back its robotaxi plans, and other big tech companies like Microsoft and Facebook haven’t expressed much interest in the space.
Many fear that Cruise, which announced yesterday that it was cutting its spending in half during its operational pause, will not survive the crisis resulting from its forced closure in California and its voluntary closure in the rest of the United States. That would leave only Waymo (which turns 15 this month) as a serious player in the robotaxi game, with Amazon’s Zoox unit about to enter but not there yet. May Mobility, Beep and a few other companies make autonomous shuttles, but not robo-taxis. Tesla promises to have a robotaxi-ready car this year, but it has done so every year for almost 8 years and is not considered a serious competitor at present, although advances could change that.
Back in History
The race for robo-taxis began when Google revealed it was trying to build one, the project now called Waymo. (I was working on that team at the time of the revelation.) This revelation sent shockwaves through the industry. Even though Google’s project was clearly very early, it woke people up in all facets of automobiles. Auto industry executives would not tolerate the press declaring that Google is the future of automobiles. Although most automakers had projects in this area that they were interested in, none were very large, and that quickly changed. Significant budgets have emerged from the largest automakers and some of the largest suppliers. In some cases, promising startups were acquired – Cruise by GM, nuTonomy by Delphi/Aptiv – but allowed to operate mostly as startups, to give them a chance to compete with Google’s methods in Silicon Valley. Other teams were run in the manner of an automobile company and tended to try to expand on the ADAS work already underway at those companies. Many startups have been created to provide this industry with software and hardware, including dozens of LIDARs and much more.
Over time, automakers have reduced their interest. They understood what a huge project the robotaxi was and how the mass-market robot car for customers was even more difficult. They know the business of selling cars to consumers well. They never liked the idea of their industry upending, and they certainly didn’t like it happening at the speed at which companies like Google tend to move. They either don’t want it to happen or they want it to happen at their own pace.
As such, support in the automotive industry has declined and projects within most companies have been downgraded to focus on driver assistance tools, or at most a driving system only on the highway. Ford has abandoned Argo and Aptiv has now abandoned Motional. GM has not yet abandoned Cruise, but it is also very disappointed and its fate is unknown.
In reality, it always seemed unlikely that automakers could lead this charge to replace themselves. That’s just not how history works. Those who have read Clay Christensen’s book “The Innovator’s Dilemma” – almost required reading in Silicon Valley – will not be surprised. Tech companies like Google/Waymo and Amazon/Zoox are left behind, but I hope Cruise is too. There are also many promising startups with no track record yet, and many small teams operating in the background. 38 companies hold testing permits in California (including Apple, Baidu Apollo, Auurora, AutoX, Beep, Bosch, Didi, Helm.AI, May, Nissan, Nuro, Nvidia, Pony, MobilEye and many others.) There are also companies active in trucking, although it has also experienced many failures. Aurora and Gatik are moving at full speed. Four companies have robotaxis services in China and have deployed several thousand robotaxis, although these are also technology companies and not automakers, although a few Chinese automakers also have projects.
Specifically, Waymo continues its history of great success, with a superb safety record, and plans to expand throughout the San Francisco Peninsula and much of Los Angeles. The major automakers, with the exception of GM and Hyundai, seem to have given way to them. . They don’t feel the pressure they felt in 2011. And that’s exactly how the Innovator’s Dilemma works. From now on, robot taxis will surprise them without their participation. They won’t seem a threat. They will seem to cost too much or don’t fit enough places. By the time they become a threat, it will be too late. It’s a pattern that has repeated itself across many industries, time and time again.
The challenge is that this is one of the most difficult technology projects ever attempted. It takes patience to do this. More than public companies or even venture capital funds normally have. Only the vision of leaders like Larry Page, Jeff Bezos and even yes, Elon Musk, if he succeeds, is capable of lasting long enough to complete a multi-decade project. But Larry Page no longer runs Alphabet on a day-to-day basis, and Bezos doesn’t run Amazon. It will be important that their visions endure. Cruise’s stumbles and Waymo’s slowness tell us that this project is very, very difficult, and requires a lot of money and work over a lot of time to complete. It remains to be seen who else will be able to understand this. The price is still enormous: dominance of the $7 trillion global ground mobility industry, or even just a decent portion of it, is enough to eclipse the value of Google, Amazon, and Apple (and Toyota, Ford and Daimler as well). however, it got bumpier.