Hyundai hits a pothole on the road to robotaxis as Tesla, Waymo pull ahead

As autonomous driving technology races ahead — with companies like Waymo and Baidu accelerating at breakneck speed — Hyundai Motor’s long-touted vision and hefty investment face a critical moment of reckoning.

Top 15 automated driving companies by year [KOREA JOONGANG DAILY]

As autonomous driving technology races ahead — with companies like Waymo and Baidu accelerating at breakneck speed — Hyundai Motor’s long-touted vision and hefty investment face a critical moment of reckoning.

Hyundai had repeatedly walked back its plan to equip the 2023 Kia EV9 and Genesis G90 with Level 3 autonomous technology due to ongoing technological limitations, but even more telling is its lag in the service-driven market, such as robotaxis, where rivals are advancing at a markedly faster pace.

Motional, a Boston-based self-driving company of which 87 percent is owned by Hyundai Motor Group, placed just 15th out of 20 in Guidehouse’s 2024 global rankings of leading autonomous tech firms, compared to 5th the year prior. The consulting firm criticized Motional for failing to establish a “sustainable business model” despite significant investment.

While Hyundai stalls, Tesla has already rolled out its full self-driving (FSD) system to the general public in the United States, and Waymo’s cumulative autonomous mileage surpassed 100 million miles as of July. Even Japan — long seen as being cautious regarding self-driving — opened its doors to pilot programs by Waymo and Tesla as of April this year.

Hyundai Motor's Ioniq 5 robotaxi, developed by Motional, is shown in this photo. [MOTIONAL]

Fragmented R&D Hyundai's rollout of Level 3 autonomous technology has been delayed for five consecutive years, with no definitive timeline currently in place.

Its struggle in the driverless car race can be traced, in large part, to a deeply fragmented innovation ecosystem, according to experts, where overlapping mandates and siloed development have hindered the cohesiveness of its technological strategy.

The group’s autonomous efforts are dispersed across a patchwork of entities, including Motional, which focuses on robotaxi deployment; the advanced vehicle platform division within Hyundai and Kia; and 42dot, a mobility software arm. Hyundai’s auto parts affiliates — Hyundai Mobis and Hyundai AutoEver — are also advancing parallel initiatives of their own.

Hyundai increased its stake in Motional in May to 86.6 percent, following an additional capital injection, bringing its total investment to nearly 5 trillion won ($3.5 billion). Motional was established in 2020 as a $4 billion joint venture between Hyundai and Aptiv, a Dublin-based mobility firm, with each party initially committing $2 billion. Last year, Hyundai acquired Aptiv’s remaining 11 percent stake, worth 1.3 trillion won, and Aptiv withdrew from further funding.

Despite five years of development, Motional has yet to deliver meaningful commercial results as it suspended its pilot robotaxi services in Las Vegas and Santa Monica, California last year, citing “high operational costs and expensive components.” Its planned commercial launch of Ioniq 5 robotaxi — originally slated for 2025 — has now been pushed back to 2026. Its cumulative losses amounted to 2.3 trillion won as of the first half of this year.

Hyundai's self-driving technology arms [KOREA JOONGANG DAILY]

“Hyundai appears to have been slow to respond to the industry’s shift toward AI-centric autonomous driving, led by Tesla and Waymo,” said Choi Jun-won, a professor of AI and member of the autonomous driving lab at Seoul National University.

“Navigating the complexity of real-world driving environments increasingly demands AI systems trained on vast volumes of data — an area where scale and speed are proving decisive.”

42dot, another Hyundai affiliate, has faced similar setbacks despite Hyundai’s almost 2-trillion-won investment. It suspended key projects before commercialization, including UMOS, an integrated urban mobility operating system for taxis and buses, and discontinued TAP!, a ride-hailing and boarding platform for self-driving vehicles, last year. Over its roughly 28-month run, TAP! logged just some 45,700 passengers and 171,718 kilometers traveled.

"In regard to global market trends, automakers, including Hyundai, have generally missed the right time to establish their autonomous driving strategies," Han Ji-hyeong, the founder and CEO of Autonomous A2Z, who has previously worked at Hyundai’s autonomous driving development division for a decade, said during an interview with the Korea JoongAng Daily last month. Han left Hyundai with three colleagues and founded A2Z, which was ranked 11th by Guidehouse.

Hyundai CEO José Muñoz struck a cautious tone regarding the launch of self-driving vehicles, adding that Hyundai “should not bring to market a product that isn’t perfect."

42dot CEO Song Chang-hyeon reveals its strategies at its Pleos 25 developer conference held in southern Seoul on March 28. [YONHAP]

Hyundai Motor's Ioniq 5 robotaxi, developed by Motional, is being manufactured at the automaker's plant in Singapore. [HYUNDAI MOTOR]

Following cautiously, albeit slowly

Hyundai takes a cautious approach to driverless driving. They claim it’s for safety reasons, but in reality, it reflects a reluctance to take risks with uncertain technology, market insiders said.

Adding to concerns over strategic coherence, 42dot in March announced it would abandon its lidar-based approach in favor of a camera-based system, aligning with Tesla’s philosophy.

Tesla has adopted an iterative model of development, deploying partially refined autonomous driving features to a select group of drivers free of charge to test safety and performance in real-world conditions. When flaws or failures emerge, Tesla incorporates them into subsequent software updates, with the system improving by collecting vast amounts of user data to learn from its mistakes.

China's BYD recently announced that all of its vehicles, including lower-end models, will be equipped with a proprietary driving assistant suite, “DiPilot,” also called the “Eye of God,” as a standard feature. BYD has pledged to accept full liability for any accidents caused while using the system — a radical promise that underscores its confidence and commitment to rapid iteration through mass-scale data collection.

Tesla's robotaxi, a driverless car with Cybertruck-like design details [TESLA]

Baidu's latest robotaxi [JOONGANG ILBO]

“There remains a significant gap in technological capability between Hyundai and global leaders like Waymo and Tesla,” said Min Kyoung-wook, the head researcher of the autonomous driving intelligence research department at the Electronics and Telecommunications Research Institute. “These companies have overcome many of the technical limitations of autonomous driving through hundreds of millions of kilometers in real-world driving data. Hyundai is making progress, but given its late start, it will take considerable time to catch up.”

“Realistically, Korea can’t lead the world in autonomous driving technology, but instead, aiming to be the third strongest player after the United States and China could be a more feasible goal,” Min added. “To close the gap, Korea must invest in large-scale driving datasets and high-performance computing infrastructure to support AI training at a national level.”

Legal liability remains a critical obstacle, as once a vehicle is marketed as Level 3 autonomous, the question of fault in the event of an accident becomes murky, blurring the lines between manufacturer and driver responsibility. For automakers, this opens the door to a significant volume of potential litigation.

It's also the reason behind Tesla continuing to deploy higher-level features under a Level 2, dubbed Level 2+ or Level 2++, avoiding the regulatory and legal burden associated with true Level 3 or Level 4 autonomy.

BY SARAH CHEA [chea.sarah@joongang.co.kr]