Hyundai Motor builds cars for Waymo: Betting on robotaxis to offset the impact of slowing EV demand

Hyundai Motor is betting on robotaxi operators as a significant new source of demand for its electric vehicles, planning to build "tens of thousands" of Ioniq 5 Robotaxis for Alphabet(GOOGL.US)-owned Waymo. Hyundai CEO Jos Muoz disclosed the production target last Thursday at an event in San Jose, California. Hyundai and Waymo announced their partnership in 2024, but the expected vehicle volume had never been revealed before. These driverless taxis will be produced at Hyundai's manufacturing facility near Savannah, Georgia. Commercial deliveries are expected to begin in the fourth quarter, following an initial pilot program. For investors, robotaxi orders help Hyundai keep its U.S. factories running efficiently at a time when U.S. consumer EV sales have fallen short of earlier industry expectations. Large fleet orders also offer more predictable volumes than retail demand, though the opportunity depends on whether Waymo and other autonomous driving companies can expand their services as planned. Automakers have scaled back EV investments amid slowing sales growth and shifts in U.S. incentive and emissions policies. Hyundai's response has been to adjust its Georgia plant to produce more hybrid models while seeking more commercial customers for its EV models. Muoz said Hyundai's robotaxi manufacturing business is already profitable and is developing into a standalone business. He also said other autonomous vehicle companies have expressed interest, which could allow Hyundai to expand beyond Waymo. These Ioniq 5 vehicles will be delivered with the modifications needed to accommodate Waymo's sixth-generation autonomous driving system. This factory-level integration can simplify the deployment process compared with vehicles that undergo extensive retrofitting after assembly. Waymo currently has about 4,000 vehicles operating or preparing to enter service across 14 U.S. cities. As autonomous mobility companies place increasingly large EV orders, its expansion positions the Alphabet subsidiary as a potentially significant fleet customer for automakers. Rivian(RIVN.US), Lucid(LCID.US) and Stellantis(STLA.US) have also announced vehicle supply agreements with Uber Technologies, Inc.(UBER.US) or other autonomous mobility partners. These deals suggest robotaxis are becoming a meaningful outlet for EV capacitythough one that is still developing.