Thursday, March 28, 2024 | Ramadan 17, 1445 H
broken clouds
weather
OMAN
23°C / 23°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Honda to invest $2.75 billion in GM’s self-driving car unit

1001507
1001507
minus
plus

WARREN: Honda Motor Co Ltd will invest $2.75 billion and take a 5.7 per cent stake in General Motors Co’s Cruise self-driving vehicle unit, to jointly develop autonomous vehicles for deployment in ride services fleets around the world.


This comes months after Japan’s SoftBank Group made a multibillion-dollar commitment to Cruise. That puts Cruise in a league with Alphabet Inc’s Waymo unit in terms of resources and aggressive plans to launch commercial services.


Honda has also been in talks with Waymo about a possible collaboration for two years. While no deal has been announced, an agreement between the two to discuss integrating Waymo’s self-driving technology into Honda vehicles still stands, a spokeswoman for the automaker said.


Honda, which has lagged many of its rivals in developing self-driving vehicles, is paying $750 million upfront for the equity stake in GM’s Cruise and will contribute another $2 billion over 12 years in development work and fees, the companies said on Wednesday.


The deal calls for Honda to provide engineering expertise, and extends cooperation between the pair in a technology that has enormous costs and risk but no market-ready products.


Other global automakers are forging similar alliances to share the uncertainty and huge price of developing technologies that have yet to gain widespread consumer acceptance.


Japanese automaker Toyota Motor Corp and SoftBank said on Thursday they were teaming up to develop car services that rely on self-driving technology.


In May, SoftBank said it would buy stakes in Cruise totalling 19.6 per cent for $2.25 billion.


In a blog post early on Wednesday, Cruise Chief Executive and co-founder Kyle Vogt joked: “Honda is joining the party. They’re bringing chips, dip, and $2.75 billion.”


Vogt said that Cruise and Honda would design a vehicle intended to be autonomous rather than the modified sedan with a steering wheel and driver controls that it is working on.


“We’re still shooting for 2019 to have the first version or first wave of vehicles that come out on our own platform. This is what comes after that,” he said.


Honda’s investment boosts the value of Cruise to $14.6 billion, about a third of GM’s $48 billion market cap. GM acquired the San Francisco-based startup in March 2016 for a reported $1 billion.


By comparison, analysts have pegged the value of Waymo as high as $175 billion.


— Reuters


SHARE ARTICLE
arrow up
home icon