Hyundai Motor Group will invest $1.6 billion in a joint venture to develop self-driving vehicle technologies with Aptiv, the biggest overseas investment by the South Korean automaker to catch up to rivals in the autonomous car market.
Global carmakers and their suppliers are forging alliances to develop autonomous car technologies partly due to the need to share the huge financial and technical burdens.
Hyundai has lagged global rivals who have invested heavily into developing new technologies for electrified an autonomous vehicles. For example, BMW and Daimler announced earlier this year that they would join forces on automated driving technology.
Hyundai Motor, Kia Motors and Hyundai Mobis will collectively contribute $1.6 billion in cash and $400 million in research and development resources and others, valuing the joint venture $4 billion, Hyundai Group and Aptiv said in a joint statement.
Dublin-headquarterd Aptiv, which will own 50 percent of the joint venture, will contribute its autonomous driving technology, intellectual property, and approximately 700 employees focused on the development of scalable autonomous driving solutions.
The new firm will begin testing fully driverless systems in 2020 and have a production-ready autonomous driving platform available for robotaxi providers, fleet operators and automakers in 2022.
The joint venture will be headquartered in Boston, with technology centers across the United States and Asia, including South Korea.
Aptiv, which manufactures vehicle components and provides technology for self-driving cars, was formerly known as Delphi Automotive, which was split into Aptiv and Delphi Technologies in 2017.
Market research firm Navigant Research Aptiv put Aptiv at No.4 among automated driving system companies, following Waymo, General Motors and Ford. Hyundai is not among the top 10 vendors, according to Navigant Research.
Aptiv said in its 2018 annual report that Hyundai Mobis was one of its competitors in advanced safety and user experience segment, along with Bosch Group and Denso Corporation.
Its major customers include GM, Volkswagen and Fiat Chrysler Automobiles, according to the annual report. Hyundai Motor is also one of its customers, a Hyundai spokesman said.