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September 23, 2019 11:30 AM, EDT

Hyundai to Set Up $4 Billion Driverless Car Venture

HyundaiSeongJoon Cho/Bloomberg News

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Hyundai Motor Group will spend $1.6 billion to develop autonomous vehicles with Aptiv Plc, marking one of the biggest investments yet by a traditional carmaker into the burgeoning robocar industry.

Aptiv will take a 50% stake in the venture, while Hyundai Motor Co., Hyundai Mobis Co. and Kia Motors Corp. will contribute a combined $1.6 billion in cash and $400 million in areas including research and development, valuing the company at $4 billion, the automaker said in a statement Sept. 23. The venture will begin testing fully driverless systems in 2020 and have a production-ready autonomous driving platform available for robotaxi providers, fleet operators and manufacturers in 2022, the statements said.

Hyundai Motor and its affiliate Kia aim to commercialize autonomous vehicles in some cities from 2021 and have a goal of launching fully driverless vehicles by 2030. South Korea’s automakers and global rivals are investing heavily to develop new models and technologies for electrified and autonomous vehicles.

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Under the agreement, Hyundai Motor Group will contribute engineering services, research and development resources and access to intellectual property, while Aptiv will provide autonomous driving technology and about 700 employees. The companies will appoint an equal number of directors in the venture, which will be based in Boston and led by Karl Iagnemma as president.

Hyundai said in February it plans to invest 14.7 trillion won ($12.3 billion) in growth areas such as autonomous driving technologies, vehicle electrification and mobility services by 2023. The company’s shares are up 12% in Seoul this year, while Aptiv has surged 41% in New York.