In recent years, Hyundai has been making strategic investments to diversify its business operations. On December 11, 2020, reports emerged that the firm and its chairman have agreed to acquire an 80% stake in Boston Dynamics, a robot maker. The majority stake in the robot maker was previously held by SoftBank.
According to Hyundai, the deal values Boston Dynamics at about $1.1 billion which means that the automaker group might have spent $880 million for the 80% stake. Interestingly, the automaker can leverage robot technology to enhance automation at its unionised car factories. Also, this technology can enable Hyundai to design autonomous vehicles like drones, self-driving cars, and delivery robots.
The Acquisition Process
This acquisition comes after Euisun Chung, the newly promoted Hyundai chairman, pledged to minimize reliance on traditional car manufacturing. He said that robotics would account for 20% of the firm’s future business, with car manufacturing taking up 50%. The urban air mobility segment of the business will take up 30%.
Hyundai Motor and its affiliates, Hyundai Glovis and Hyundai Mobis will hold a cumulative 60% stake in Boston Dynamics while Chung will own a 20% stake. Chung commented:
“The transaction will unite capabilities of Hyundai Motor Group and Boston Dynamics to spearhead innovation in future mobility.”
In 1992, Boston Dynamics was spun out from the Massachusetts Institute of Technology. In 2013, the company was bought by Google who later sold it to SoftBank in 2017. Among the company’s products is Spot. By description, Spot is a 4-legged dog-like robot that is designed to climb stairs easily. It has gained massive media attention even as it struggled to create a commercial business.
Ford Motor Co is one of the notable clients that leased two Spot robots in July as part of their pilot program. One analyst at Hi Investment & Securities, Koh Tae-bong, commented:
“Hyundai needs to prove that Boston Dynamics can be commercially successful and is capable of competing with cheaper Chinese rivals.”
In 2019, Ford stated that it was partnering with Agility Robotics, a walking robot maker. Ford is in the process of designing a scheduled fleet of self-driving delivery vans that will drop packages at the doorsteps of private homes. This buyout by Hyundai marks the latest pullback by SoftBank from operating businesses as Masayoshi Son, the company’s CEO, focuses on investing.
Also, many assume that it marks the dwindling of SoftBank’s robotics ambitions that were talked up by Son. The group’s in-house rump robotics business that features the humanoid robot Pepper now appears increasingly isolated.
On the part of Hyundai, the deal is the latest in a flurry of deals under the stewardship of Chung. He pledged to transform the automaker into a mobility provider. The company decided to take this strategy amid threats from Tesla, an electric carmaker, and tech firms that offer self-driving, ride-sharing, and many other technological solutions. Mobility consultant Cha Doo-won stated:
“Automakers are in an innovation race. Hyundai is a late-comer to the race, and it seems that they want to showcase that they can do it, rather than trying to generate money from the robot business.”
Other Hyundai Investments
Hyundai Motor has even developed a wearable robot that is designed to minimize fatigue for the factory workers. The company already ran trials at its United States plants and reported convincing results.
In January, Hyundai confirmed that it had partnered with Uber to design and operate electric air taxis. But, the project has not turned out as expected. This week, the US firm announced that it would sell this loss-making flying taxi segment to Joby Aviation. Joby is an electric passenger aircraft developer that is confident of making profits from the flying taxi business.