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The autonomous driving industry has been dynamic and rapidly changing at the same time. Just last week (September 18), L4 autonomous driving company Motional, which is valued at nearly 30 billion yuan, announced a big change in leadership: the CEO has suddenly voluntarily "stepped down".

Karl Iagnemma, its president and Chief Executive officer (CEO), will transition to a senior strategic advisor role. Motion's Chief Technology Officer (CTO), Laura Major, will assume a larger leadership role as interim CEO and Chief Technology Officer.

Motional did not disclose a reason for the change, but a person familiar with the matter said there were no behind-the-scenes problems. Iagnemma added, "I look forward to continuing to support Motional's mission as a consultant and am excited about the future of the team."

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Motional's initial team came from Nutonomy, a startup founded in 2013 by Iagnemma and Emilio Frazzoli, a professor of dynamic systems and controls at ETH Zurich.

While Nutonomy hasn't been in the spotlight like other larger, better-funded self-driving companies such as Waymo, it created a buzz among investors and the automotive and tech industries when it first launched a public trial of its self-driving car service in Singapore in August 2016.

Just over a year later, Nutonomy was acquired by Delphi for $450 million. Later, Delphi split into two companies: its powertrain business became Delphi Technologies, while Aptiv focused on the design and production of electronic systems, advanced safety technologies, and hardware and software needed for autonomous vehicles, and NuTonomy was merged into Aptiv.

During Aptiv's tenure as President of the Autonomous Vehicle Division, Iagnemma also led the release of nuScenes, the first publicly available autonomous driving dataset, This included 1.4 million images from across Boston and Singapore, 390,000 LiDAR scans, and 1.4 million hand-labeled 3D object bounding boxes.

Two years later, with the hype and promise of autonomous vehicles at its peak, Hyundai and Aptiv formed an L4 autonomous driving joint venture (later renamed Motional), and Iagnemma, who was originally president of Aptiv's autonomous vehicle division, was chosen to head Motional. At the time, the companies said the combined investment in Motional would total $4 billion, including the value of combined engineering services, research and development and intellectual property.

Iagnemma is not only a central figure at Motional, but also a heavyweight pioneer in the self-driving car industry. Iagnemma is well known in the academic field for its research on robotics and autonomous vehicles. As a member of the former MIT team, he participated in DARPA's autonomous vehicle development project, the Urban Challenge, in 2007.

With such achievements, the industry veteran suddenly and calmly "let go" of the company he founded for 11 years. The reasons behind this have to be explored deeply.

Abandoned by investors, profitable businesses are suspended

In fact, Motional has made some progress in launching a self-driving taxi, but it has also faced serious funding difficulties that have delayed its business plan.

In January, Aptiv (one of the partners in the joint venture) announced that it would no longer fund the project. "While our Motional joint venture continues to make progress on its technology roadmap, we have decided that we will no longer allocate funds to Motional and are pursuing alternatives to further reduce our ownership interest." Kevin Clark, chairman and CEO of Aptiv.

"From a mobile on-demand market adoption perspective, the costs associated with delivering the technology primarily in and around the hardware really make it challenging," Clark added. In other words, the cost of setting up a self-driving taxi service is high, and the time to recoup these precious funds is too long for Aptiv to wait.

In March, it was announced that Motional had secured an undisclosed bridge loan as a lifeline, and the self-driving startup's next round of long-term funding was completed.

It was Hyundai Motor that finally stepped up and agreed to invest another $1bn in Motional in May. Hyundai Motor will invest 475 million dollars in Motional and acquire 11 percent of Aptiv's common stock for 448 million dollars. The deal gives Hyundai a majority stake while also providing the self-driving startup with the money it needs to stay afloat.

But all this is not without cost. Motional's commercial ideas include offering a taxi service in Las Vegas using self-driving Hyundai Ioniq 5 vehicles through the Uber and Lyft networks. As part of a corporate restructuring plan, Motional will cut about 550 jobs, suspend its commercial operations and stop using self-driving cars to deliver food to Uber Eats customers in Santa Monica. It also delayed plans to launch the next generation of robotaxi services using Hyundai's Ioniq 5 robotaxi to 2026.

Aptiv's earnings report for the first quarter of this year made it clear that the company is trying to manage risk and optimise its finances in the face of a relatively weak business outlook, but Aptiv's withdrawal and Hyundai's takeover of a majority stake have raised concerns and questions about Motional's future.

A source familiar with the matter said the restructuring was aimed at breaking new ground in core technologies and business models while preserving capital. Under the new plan, Motional intends to devote more resources to honing its core technology. A person familiar with the matter said that means more testing, including possibly considering deploying the vehicles to more other cities. Motional has been testing its self-driving technology in Boston, Pittsburgh and Las Vegas.

Commercial deployment of L4 remains challenging

Motional's financial turnaround comes as the self-driving taxi industry continues to face uncertainty. While the startup has been slowly moving toward commercialization and has launched pilot programs in at least five cities, it has yet to start charging for rides or deliveries.

When the restructuring was announced, Motional employees were told that deploying commercial use cases remains challenging due to the high cost of commercial operations and components for autonomous vehicle technology. Shortly after that, Iagnemma also published a blog post outlining its restructuring plan to "focus resources on the continued development and roll-out of our core driverless technology, while de-emphasizing near-term commercial deployments and driver-assisted use cases."

In a blog post, Iagnemma explained that "As the technology matures, and more importantly when the commercial use case for autonomous deployment is clear enough, driverless cars will officially enter the market." "While we are excited by the pace of technological progress and have gained valuable insights from our initial commercial deployments, deploying autonomous vehicles on a large scale is still not something that can be achieved in the short term and will require a longer time horizon."

In the L4 autonomous driving market, the commercial landing of GM's Cruise has also stalled due to an October 2023 accident in which a pedestrian was pinned under and dragged by one of the company's self-driving taxis. But GM has begun redrawing the map in Phoenix, opting for a slower, more deliberate approach to putting vehicles back on public roads.

But at the same time, there are also a number of L4 autonomous driving is in the commercial deployment of the rising period. Waymo continues to expand its fully driverless paid robotaxi service in the United States in San Francisco, Los Angeles and Phoenix, with plans to land in Austin later this year. Baidu Apollo is fully promoting the large-scale application of fully unmanned autonomous driving, and has realized the commercial operation and testing of fully unmanned autonomous driving in many cities in Beijing, Chongqing and Wuhan.

Reference link:

https://techcrunch.com/2024/09/18/ceo-of-self-driving-startup-motional-is-stepping-down/?guccounter=1

https://techcrunch.com/2024/05/02/hyundai-is-spending-close-to-1-billion-to-keep-self-driving-startup-motional-alive/

https://techcrunch.com/2024/01/31/autonomous-vehicle-company-motional-is-about-to-lose-a-key-backer/

https://techcrunch.com/2024/05/07/motional-delays-commercial-robotaxi-plans-amid-restructuring/