Delphi acquires autonomous vehicle software supplier NuTonomy

DETROIT -- Delphi Automotive said it plans to acquire Boston-based autonomous vehicle software supplier NuTonomy in a deal that could be valued at $450 million.

The acquisition, which is expected to close before the end of this year, will nearly double Delphi's 100-plus automated driving team with NuTonomy's 100 employees, including 70 engineers and scientists, the company said in a news release.

NuTonomy will continue to operate in Boston, alongside Delphi's team in Boston, as well as in Delphi offices in Singapore; Pittsburgh; Santa Monica, California; and in Silicon Valley in California.

Glen De Vos, chief technology officer for Delphi, said the acquisition of NuTonomy allows Delphi access to the commercial truck market.

"We think this is the tip of the spear for automated driving," De Vos said Tuesday in a conference call with reporters. "This dramatically accelerates our penetration in this marketplace."

Upon completion of the transaction, Delphi will have 60 autonomous-driving cars testing on roads in three continents, the company said. The base cost of the acquisition is $400 million along with possible additional earn-outs of $50 million, Delphi said.

The acquisition of NuTonomy is the latest for Delphi as it races to build its autonomous driving business. Delphi acquired Pittsburgh-based Carnegie Melon spinoff Ottomatika in 2015 for an undisclosed sum; Allen Park-based Control-Tec, a provider of telematics and analytics software provider, for $100 million; Plymouth-based over-the-air software update provider Movimento for an undisclosed sum.

The four autonomous driving add-ons will continue to operate as separate entities, but will coordinate on projects, De Vos said.

Testing vehicles

Delphi and NuTonomy have been testing automated vehicles in Singapore, where regulators announced plans on Monday to halt growth in its vehicle population to ease traffic congestion. The city-state has been at the forefront of promoting self-driving cars.

Automakers and suppliers are investing in self-driving cars and ride services in part as insurance against such moves by the world's largest cities to limit private, petroleum-fueled car use. London on Monday said it would charge an additional 10 pound tax on older diesel cars entering certain parts of the city.

General Motors has been testing its self-driving cars in San Francisco and will begin testing in New York City.

"As cities get more crowded, infrastructure has trouble keeping up," NuTonomy CEO Karl Iagnemma told Reuters on Tuesday. Ride services using autonomous vehicles could meet transportation needs with fewer cars on the road, he said.

"Cities like Singapore and London are going to show the rest of the world what's possible," he said.

The initial application of the auto supplier's self-driving cars will be in on-demand passenger and logistics fleets. Those vehicles, DeVos said, will be heavily automated and used in pre-mapped areas in cities. 

Delphi, meanwhile, is spinning off its powertrain unit to focus on developing technology for autonomous and connected automotive systems, the culmination of years of moves aimed at focusing the auto supplier on advanced technologies. The spinoff, which will be tax-free, is expected to be completed by March, Delphi said. Current Delphi shareholders will hold stock in both companies.

Reuters contributed to this report.