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Why Hyundai Motors Wants to Acquire Boston Dynamics from SoftBank Group

Editor, TRANSFIN.
Dec 15, 2020 9:48 AM 3 min read
Editorial

Hyundai is buying the “robot dog company”.

You might have seen viral videos of Spot, the agile robot dog used in a wide range of applications including monitoring construction sites, providing remote inspection at oil installations, measuring patients’ vital signs, patrolling parks to encourage social distancing, and even cheering on Japanese baseball players.

The company behind Spot is US-based Boston Dynamics. Hyundai Motor Group - along with a consortium of associated companies and Chairman Euisun Chung - will now acquire 80% of Boston Dynamics. The remaining 20% will be retained by SoftBank Group, the engineering company’s present parent.

The sale is expected to be finalised by June 2021 and will cost Hyundai $880m, valuing Boston Dynamics at $1.1bn.

About Boston Dynamics

Hyundai’s acquisition would mark another new chapter in the robotics firm’s long and interesting history. It was founded in 1992 as a spin-off from the Massachusetts Institute of Technology. In 2013, it was bought by Google until it was sold to SoftBank in 2017.

Boston Dynamics had a knack for churning out technologically advanced robotic machines that became darlings of the internet. But the company didn’t generate any profit. Google tried to steer the company towards profitability, a process that accelerated under SoftBank. One of the ways the parent company tried to achieve this is by making the agile robots commercially available - Spot has been in the market since 2019 for a price tag of $75,000.

 

Enter, Hyundai

The South Korean giant already specialises in making highly practical industrial robots specifically intended for factory use. The automotive group has been developing robotics such as exoskeleton suits that help ease fatigue and prevent injury for factory workers. It’s also working on robots with artificial intelligence that can provide assistance at hotels and in other service sectors - indicating that it is serious about foraying into the humanoid robot market.

Indeed, announcing the acquisition, Hyundai said it “furthers [our] portfolio of technology...Boston Dynamics will expand Hyundai’s footprint in logistics robots.”

The acquisition also sits comfortably with Hyundai’s increasing investments in electric and autonomous vehicles. Moreover, Chairman Chung plans to take the company into the aerial vehicle market by 2028.

That’s a lot of advanced technology and expertise to be handled by humans alone!

 

We Take Care of Our Own

From a broader perspective, the Hyundai-SoftBank deal points to a larger trend of auto manufacturers striving for self-dependency ahead of the electric future. Accessing Boston Dynamics’s software catalogue makes Hyundai privy to advanced tech that can make it more competitive in the electric vehicle market.

This is similar to what we saw in October, when Japan’s Nidec Corporation made clear its intentions to strengthen its hold on the critical e-axle market through a series of M&A. Other auto companies aren’t far behind - they have been collaborating or consolidating left, right and centre.

For example, Volkswagen announced a partnership with robot maker Kuka in 2017. This year, America’s BorgWarner acquired UK-based Delphi even as Japan’s Hitachi Automotive merged with three Honda Group suppliers. Meanwhile, Volkswagen + Ford and Toyota + smaller Japanese brands are each forming a technology alliance.

The idea is to be as technologically self-reliant as possible so as to be more globally competitive. Atma Nirbhar Automobile Manufacturing, if you will.

 

The Rise of Robots

The advent of robots in the automotive industry is hardly surprising.

In fact, automobiles is one of the industries where robotic machines find widespread application. Case in point: In recent years, over half of industrial robot purchases in North America have been made by automakers alone.

FYI: The first industrial robot, the Unimate, was designed in 1954 by George Devol. It was installed and used at a General Motors plant in Trenton, New Jersey.

Automotive robots are predominantly used in welding, painting and handling operations. As technology advances, they have also been used in micro-manufacturing and collaborating with human workers to perform complicated tasks (so-called Cobots).

All in all, the automotive robotics market is set to grow to over $5.96bn by 2024, according to Global Market Insights.

Today’s robots are nothing like their ancestors a few decades ago - many are autonomous, with machine vision systems that enable them to interact with the environment and work side-by-side with humans.

With time, robotics will invariably advance even further. All hail the industrial robot revolution!

FIN.

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