Delphi to Buy Self-Driving Car Tech Startup for $450 Million

By Chester Dawson and Tim Higgins Features Dow Jones Newswires

Delphi Automotive PLC said Tuesday it has agreed to buy a self-driving car tech startup for $450 million, boosting the automotive supplier's drive to bring autonomous vehicles to market by the end of the decade.

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The purchase of NuTonomy Inc., a Boston-based software firm focused on automated driving technology, positions the combined company as one of the leading players globally in a rapidly developing market for partially or fully self-driving cars.

The deal for NuTonomy adds top robotic talent to Delphi's growing stable of acquisitions and partnerships as it looks to create an entire autonomous vehicle system that it can sell to auto makers. For NuTonomy, Delphi's scale provides leverage to hasten the industrialization of self-driving technology, allowing it to put its stamp on software installed in millions of future vehicles.

Delphi said it will integrate NuTonomy's expertise in fleet-based automated driving platforms, which are expected to debut before the technology becomes more broadly available for retail car buyers.

"The commercial market is the first application and this dramatically helps us accelerate our participation," Glen De Vos, Delphi's chief technology officer, told reporters on a conference call.

Mr. Glen said Delphi plans to roll out so-called level-four automated driving, in which vehicles drive themselves but with a driver on hand, by 2019 on a small scale in certain areas of select markets. The addition of NuTonomy's technology will help speed up the expansion of those programs into the next decade among operators of vehicle fleets, he said.

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As money flowed into autonomous car companies and auto makers spent big money to acquire the top self-driving vehicle technology, the question in Silicon Valley among many close observers has been what would happen to NuTonomy, a promising startup with operations in Boston and Singapore.

The startup emerged out of research at the Massachusetts Institute of Technology, founded in 2013 by Karl Iagnemma, former Robotic Mobility Group director at MIT, and Emilio Frazzoli, a professor.

Both Mr. Iagnemma and Mr. Frazzoli plan to continue their work at the combined company, a Delphi spokesman said.

Delphi's move comes as part of its transition from a hardware-dependent component maker to a software-focused service supplier. The company, which plans to rename itself Aptiv, announced a strategic shift earlier this year involving the spinoff of its once core engine components unit and decision to target higher tech electronics for advanced safety and self-driving applications.

The challenge for a standalone NuTonomy has been money -- as a small startup it lacked the cash horde to do the costly things required to scale up to compete against Google-parent Alphabet Inc.'s self-driving tech unit Waymo or General Motors Co.'s Cruise Automation, the autonomous vehicle startup the Detroit auto maker acquired last year. Both of those programs are rushing to put hundreds of test vehicles on roads across the U.S.

NuTonomy had equally big ambitions. It was the first to test a robot taxi in Singapore, ahead of Uber in Pittsburgh, much to the bigger company's chagrin. It also has been testing in Boston, had announced a partnership with Lyft and has worked to boost its on-road testing through a partnership with Peugeot in Singapore.

In June, Delphi partnered with French bus and train operator Transdev to deploy a self-driving on-demand transportation service this year using the automotive supplier's automated driving technology. The two companies said it would be the first self-driving vehicle service to operate on public roads in Europe, and that they are looking for additional pilot program sites in North America.

Write to Chester Dawson at chester.dawson@wsj.com or Tim Higgins at tim.higgins@wsj.com

Write to Chester Dawson at chester.dawson@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com

(END) Dow Jones Newswires

October 24, 2017 12:17 ET (16:17 GMT)