October 22, 2018

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Honda Putting $2.75 Billion Into G.M.’s Self-Driving Venture

Honda Putting $2.75 Billion Into G.M.’s Self-Driving Venture
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G.M. acquired Cruise, then called Cruise Automation, in 2016 for a reported $1 billion in cash, stock and incentive compensation. It has since added other properties to the effort. A year ago, it bought Strobe, a company that specializes in laser-imaging technology, and folded it into Cruise.

Rather than go at it alone, G.M. has brought on partners to help fund the project in hopes of speeding development. Earlier this year SoftBank, the Japanese tech and investment firm, invested $2.25 billion in Cruise. As part of that deal, G.M. said it would put an additional $1.1 billion of its own money into the unit, which is based in San Francisco. SoftBank’s investment was made through its Vision Fund, which focuses on the technology sector.

In addition to money, Honda will provide expertise in manufacturing and engineering compact vehicles, where space is at a premium.

“With the backing of General Motors, SoftBank and Honda, Cruise is deeply resourced to accomplish our mission to safely deploy autonomous technology across the globe,” said Kyle Vogt, chief executive of G.M. Cruise Holdings. “We want to be able to produce this car in high volume when we’re ready to put it into use.”

G.M. and Honda remain competitors in the business of building cars, sport utility vehicles and light trucks, but have grown closer in recent years. In 2017, they began working together on a plant in Michigan to produce technology for vehicles powered by hydrogen fuel cells. They also cooperate in battery technology.

G.M., Waymo and others are betting that driverless ride services will spread rapidly once they are able to produce vehicles that can operate with input only from sensors, software and computer chips.

Waymo has made plans to buy up to 20,000 compact electric vehicles from Jaguar Land Rover, starting in 2019. It has also agreed to buy up to 62,000 Pacifica minivans from Fiat Chrysler Automobiles, potentially giving it a fleet of more than 80,000 driverless vehicles within three or four years. Waymo is already operating a test fleet of driverless taxis in Arizona.



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