Partnerships are forming in the auto industry to bring more electric and autonomous cars to the roads of the world, and this is a big one. In a press release, General Motors and Cruise Automation today announced a collaboration with Honda that will seek “large-scale deployment” of technology for autonomous vehicles. Considering the monetary investments are running into the billions of pounds, this is indeed a tremendously substantial endeavor.
Specifically, Honda will inject $2 billion (£1.5 billion) over the next 12 years, along with a $750-million (£575-million) equity investment in Cruise for a grand total of $2.75b (£2.1b). That’s no small amount of change devoted to mainstreaming automation in vehicles, and with other investments into the pot from SoftBank, Cruise is now valued at $14.6b (£11.2b).
Just as a refresher – California-based Cruise Automation entered the scene in 2013 as a developer of autonomous vehicle tech. After quite a bit of success, GM acquired the company in 2016 for an undisclosed amount, though rumours put the price anywhere from $500m (£385m) to over a billion (£770m). In other words, GM is very serious about being a leader in the autonomous world.
“This is the logical next step in General Motors and Honda’s relationship, given our joint work on electric vehicles, and our close integration with Cruise,” said Mary Barra, GM’s CEO “Together, we can provide Cruise with the world’s best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology – while they move to deploy self-driving vehicles at scale.”
Moving forward in this tech-heavy sector is something many experts in the auto industry – from senior executives at automakers to technology start-ups – believe will only happen through strategic partnerships. Back in February, the chairman of Chinese automaker Geely even went so far as to predict only two or three manufacturers would exist in the future and cited a need for companies to unite in order to survive.
Gallery: Chevy Bolt autonomous test car
Honda Joins with Cruise and General Motors to Build New Autonomous Vehicle
Honda investment of $750 million values Cruise at $14.6 billion
SAN FRANCISCO — Cruise and General Motors Co. (NYSE: GM) announced today that they have joined forces with Honda (TYO: 7267) to pursue the shared goal of transforming mobility through the large-scale deployment of autonomous vehicle technology.
Honda will work jointly with Cruise and General Motors to fund and develop a purpose-built autonomous vehicle for Cruise that can serve a wide variety of use cases and be manufactured at high volume for global deployment. In addition, Cruise, General Motors and Honda will explore global opportunities for commercial deployment of the Cruise network.
Honda will contribute approximately $2 billion (£1.5 billion) over 12 years to these initiatives, which, together with a $750 million (£575 million) equity investment in Cruise, brings its total commitment to the project to $2.75 billion.
In addition to the recently announced SoftBank investments, this transaction brings the post-money valuation of Cruise to $14.6 billion.
“This is the logical next step in General Motors and Honda’s relationship, given our joint work on electric vehicles, and our close integration with Cruise,” said General Motors Chairman and CEO Mary Barra. “Together, we can provide Cruise with the world’s best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology – while they move to deploy self-driving vehicles at scale.”
“Honda chose to collaborate with Cruise and General Motors based on their leadership in autonomous and electric vehicle technology and our shared vision of a zero-emissions and zero-collision world,” said Honda Executive Vice President and Representative Director COO Seiji Kuraishi. “We will complement their strengths through our expertise in space efficiency and design to develop the most desirable and effective shared autonomous vehicle.”
“With the backing of General Motors, SoftBank and now Honda, Cruise is deeply resourced to accomplish our mission to safely deploy autonomous technology across the globe,” said Cruise CEO Kyle Vogt. “The Honda partnership paves the way for massive scale by bringing a beautiful, efficient, and purpose-built vehicle to our network of shared autonomous vehicles.” More details on the benefits of the partnership to Cruise can be found here.