Honda to invest US$2.75 billion in GM's Cruise autonomous vehicle unit
DETROIT -- Honda Motor Co. will invest $2.75 billion (all figures in USD) into General Motors' autonomous vehicle operations.
The Japanese automaker will receive a 5.7 per cent stake in GM Cruise LLC for the investment, which includes an immediate $750 million and another $2 billion for development and deployment of self-driving vehicles over the next 12 years, GM said in a news release on Wednesday.
The investment values Cruise at $14.6 billion -- $3.1 billion more than when SoftBank Vision Fund, a prominent technology investment firm, announced plans to invest $2.25 billion in the operations in May.
That deal gave SoftBank a 19.6 per cent stake in GM Cruise, which includes Cruise and Strobe Inc., a lidar company GM acquired in October 2017.
The investment from Honda comes roughly nine months after GM announced plans to launch public ride-hailing services with self-driving vehicles that don't have manual controls such as steering wheels and pedals, starting in 2019.
Cruise CEO Kyle Vogt, in a post on Medium, said the company has already started “quietly prototyping a ground-breaking new vehicle over the past two years that is fully released from the constraints of having a driver behind the wheel.”
“Building a new vehicle that has an incredible user experience, optimal operational parameters, and efficient use of space is the ultimate engineering challenge,” he wrote. “We’re going to do this right, and by joining forces with Honda we’ve found the perfect partner to help make it happen.”
GM previously said it planned to begin testing its autonomous vehicles this year in New York. However, the company had not provided any updates on those plans.
Honda’s investment in Cruise expands the ties between the Japanese automaker and GM. In June, the two companies announced plans to develop a new generation of batteries aimed at cutting costs and accelerating the companies’ rollout of electric vehicles.
The companies also previously formed an advanced-technology alliance announced last year between GM and Honda, which have been working on advanced hydrogen fuel cells for deployment in 2020.