CONTRIBUTION Startups urge Hyundai Motor to take broader view on self-driving initiative
An IONIQ 5-based robotaxi developed by Hyundai Motor Group and Motional is parked at Motional’s Technical Center in Las Vegas. The fully driverless autonomous vehicle is set to begin commercial passenger service in Las Vegas this year. Yonhap
South Korea is stepping up efforts to develop its autonomous driving industry, aiming to bring it on par with China and the United States.
The most ambitious initiative is to take place in the southwestern city of Gwangju, where the entire city is designated as experimental space for self-driving vehicles, providing an opportunity to develop related technologies and assess prospects of commercial deployment.
When the Ministry of Land, Infrastructure and Transport announced the plan anda 60 billion won (around $41 million) investment to deploy 200 autonomous driving vehicles, it drew attention from both automotive and tech sectors — not just because of the scale, but also because the project was expected to spur advances in fields such as artificial intelligence and big data analytics.
But as the April deadline the ministry set to select participating companies draws closer, smaller firms and startups are growing increasingly concerned, particularly over vehicle procurement.
Hyundai Motor is the sole supplier of test vehicles for the project, as one condition of participation in the state-funded program requires that companies have headquarters in Korea. Self-driving software firms must purchase vehicles from Hyundai before installing their own systems and conducting tests in Gwangju.
Choi Youn-jin
What came as a surprise, however, was the cost. During preliminary discussions with Hyundai, some companies were quoted a price of 200 million won per unit.
For smaller companies participating in the project, the price effectively means operating at a loss. They are set to receive a subsidy of 300 million won per unit — 240 million won from state funds and 60 million won from private investment — but a substantial portion would be consumed just by the cost of purchasing the vehicles. Companies would still be left to shoulder research, development and labor costs.
In Hyundai’s defense, the company is not necessarily reaping windfall profits. Vehicles intended for autonomous testing must be specifically engineered to operate primarily through software, much like smartphones. As a result, the cars had to be designed and built from the ground up.
There are two viable ways to resolve the issue. One would involve Hyundai treating the Gwangju program as a strategic investment and lowering vehicle supply prices.
Another way would be to deploy an already existing model rather than developing a new one. Hyundai’s IONIQ 5, already used by Alphabet’s autonomous driving subsidiary Waymo, is priced at around 60 million won per unit, and could reduce supply costs.
Startups and smaller companies are urging Hyundai to take a more holistic view for the broader development of Korea’s autonomous driving industry. They argue that Hyundai, too, stands to benefit from the data generated through the program, giving the company reason to view lower vehicle prices as a strategic investment.
The Ministry of Land, Infrastructure and Transport, who has the final say in the matter, responded that vehicle pricing has not yet been finalized and discussions with Hyundai are planned.
In launching the initiative, the government said its goal was to bring Korea’s autonomous driving sector on par with China and the United States, which currently lead the field.
By that logic, both the government and Hyundai may need to take a more holistic, forward-looking approach.
This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.