Aptiv to lower equity interest in joint venture with Hyundai, cuts FY sales view
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Under the agreement, Aptiv will not be required to fund the joint venture in the future, while Hyundai will provide additional funding.
The transactions are expected reduce Aptiv’s common equity interest from 50% as of March 31, 2024 to about 15%.
Motional uses Hyundai’s IONIQ5 electric car for its robotaxi service, which it offers in Las Vegas through Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT).
Aptiv’s move follows that of Ford Motor (NYSE:F), Volkswagen (ETR:VOWG_p) and General Motors (NYSE:GM) as they cut down or back away from the autonomous technology, often touted as the future of mobility.
Aptiv also cut its full-year 2024 net sales forecast to be between $20.85 billion and $21.45 billion, compared with its prior projection of $21.3 billion to $21.9 billion.
“We will continue to benefit from both our portfolio of leading technologies and our relentless focus on cost optimization to drive outperformance through the back half of the year,” said Aptiv CEO Kevin Clark.
Aptiv flagged a slowdown in electrification in North America and Europe, along with persistent labor and material cost headwinds impacting operations.
But demand for Aptiv’s modern safety equipment helped soften the impact, powering a first-quarter profit beat.
On an adjusted basis, it earned $1.16 per share in the quarter, compared with LSEG estimates of $1.01 per share.
Its quarterly net sales rose about 1.7% to $4.9 billion over the year earlier.