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Boston firm Motional is latest victim of self-driving car backlash

NuTonomy's driverless car takes a spin around Drydock Ave. in 2017. The company was acquired by Aptiv (then called Delphi) and later was backed jointly by Aptiv and Hyundai.Jessica Rinaldi

Boston-based tech company Motional says it will carry on its quest to develop self-driving vehicles, even as one of its owners announced this week it will stop funding the effort.

Analysts and industry veterans say the decision by Dublin-based Aptiv is just one of many signs that autonomous vehicles are still a long way from being either practical or profitable. Motional is a joint venture between Aptiv and Korean carmaker Hyundai.

“While our Motional joint venture continues to make progress on their technology road map,” said Aptiv chief executive Kevin Clark on Wednesday, “we’ve decided to no longer allocate capital to it.” Aptiv estimated that its investment in Motional would cause an equity loss of $1.20 per share or $340 million in 2024.


“Motional is really just experiencing what has already struck most of the other companies that are in this space,” said Gartner Group automotive analyst Mike Ramsey.

Despite the setback. Motional said it will press on. In an emailed statement, a Motional spokesperson said, “We’re confident in our funding roadmap and are well positioned for the next phase of our commercialization. Our team is focused on scaling our driverless services, expanding Motional’s commercial partnerships, and furthering development on Motional’s next-generation robotaxi in collaboration with Kia,” a carmaker owned by Hyundai.

It’s unclear whether there will be layoffs, restructuring, or other changes at Motional. The company wouldn’t comment beyond its statement. Hyundai didn’t respond to a request for comment.

Motional began life in 2013 as NuTonomy, a spinoff from the Massachusetts Institute of Technology that designed software for autonomous cars and robots. Aptiv (then called Delphi Automotive) acquired the company in 2017, the same year that NuTonomy began testing self-driving cars in Boston’s Seaport District. Cofounder Karl Iagnemma is still the company’s president and chief executive.


In 2020, Aptiv joined with Hyundai to create Motional, with the goal of commercializing self-driving vehicles, beginning with “robotaxis” to ferry passengers in urban areas. Motional runs a robotaxi service in Las Vegas, an autonomous food delivery service in Los Angeles in cooperation with Uber Eats, and continues to run test vehicles in Boston, Pittsburgh, and Singapore.

“Given the state of the AV industry, it’s not surprising” that Aptiv wants out, said Matt Ryan, a former Motional software engineer. “The operations are expensive, the engineers to build the cars are expensive, the sensor/computer technology needed in the cars is expensive,” Ryan wrote in an email.

At the same time, the technology remains half-baked. Cruise, a robotaxi service operated by General Motors, was shut down last year after one of its vehicles ran over a pedestrian who’d been hit by another car. Earlier this week, GM said it will reduce spending on Cruise by $1 billion this year. In 2022, Ford and Volkswagen gave up on their self-driving project Argo AI after spending $3 billion on research and development.

Dylan Khoo, an automotive analyst for ABI Research, said today’s higher cost of capital is a big reason Aptiv and other companies are backing off. “There was a period for about 10 years when money was really cheap to get,” Khoo said. But since the Federal Reserve raised rates to fight inflation, “it’s harder to get loans and get money these days.”

Meanwhile, said Khoo, today’s self-driving taxi services require constant oversight, including workers who can come to the rescue when a vehicle goes wrong. The extra cost makes them very unprofitable. “If you can’t get it fully to work, it’s not viable at all,” Khoo said.


Ramsey believes self-driving systems are nowhere near ready for everyday use under all kinds of driving conditions.

“This kind of technology is probably going to take a long time to commercialize, and it’s going to be done in bits and pieces, not all at once,” he said. “It’ll probably be another 20 years.”

Hiawatha Bray can be reached at hiawatha.bray@globe.com. Follow him @GlobeTechLab.