With a $2.25 billion investment infusion into GM Cruise Holdings from the SoftBank Vision Fund fueling its aspirations, General Motors announced yesterday that it will be bringing autonomous vehicles to U.S. sometime next year. When the deal closes, SoftBank will own a 19.6% equity stake in GM Cruise and GM will itself invest $1.1 billion in the subsidiary.
GM didn’t say exactly where the vehicles would be roaming but Michael Ronen, managing partner at SoftBank Investment Advisers, said it “would be one of the largest scaled, or the largest scaled, effort in the space,” Jamie LaReau reports for the Detroit Free Press. “There is a lot of interest in the space. This is as big as it gets,” Ronen continued on a conference call with reporters.
“We were blown away by the ability of the Cruise team to iterate quickly, to work through the integrated approach, which we believe is crucial to the success of this business,” Ronen also said.
Indeed, “experts say that the investment can be seen as a vote of confidence in a legacy automaker. SoftBank is already heavily invested in ride-hailing services, such as Uber and China's Chuxing Didi, as well as self-driving technology firms, including the mapping firm Mapbox. The partnership with SoftBank may offer GM additional expertise in developing app-based services,” Hamza Shaban writes for the Washington Post.
“If you combine GM’s technology with the distribution network in some sense represented by Uber and Didi and Grab, it makes it more likely that GM will be the first to market with an autonomous taxi on demand,” Arun Sundararajan, a professor at New York University’s Stern School of Business, tells Shaban. “We hear a lot about Tesla and Uber, but their autonomous technology is significantly behind Waymo and GM. Apart from Waymo, I don't see any other company that poses a significant threat to GM being the first to market at scale.”
Indeed, “GM is already building autonomous versions of the Chevrolet Bolt EV on a production line in Detroit,” write Chris Isidore and Peter Valdes-Dapena for CNN Money. “Beyond sheer numbers GM also makes a wide range of vehicle types and sizes into which self-driving technology could be used, said Brian Moody, an executive editor with Autotrader.”
“Look at the range from a Chevrolet Spark [subcompact] to a Chevy Silverado to a Cadillac Escalade and even the popularity of Buick in China,” Moody says.
“But what’s most important about this investment to Cruise CEO Kyle Vogt,” writes Megan Rose Dickey for TechCrunch, “is the fact that Cruise — which sold to GM for more than $1 billion in 2016 — now has stock and equity in the company again.”
“That’s because ‘we’re in a war right now to attract the greatest minds in the world to work on this,’ Vogt tells Dickey. “And in order to keep those great minds on board and continue attracting new ones, Vogt said he wants to give them a chance to ‘participate in the value we create.’”
“The SoftBank investment in Cruise will be made in two parts. The first tranche of $900 million will be made at the closing of the transaction. Once Cruise’s autonomous vehicles are ready for commercial deployment, SoftBank will complete the second investment of $1.35 billion,” writes Kirsten Korosec for Fortune.
Waymo, meanwhile, isn’t just idling at the charging station.
Its “fleet of self-driving Chrysler Pacifica minivans just got radically bigger,” Andrew J. Hawkins reports for The Verge. “The Alphabet unit announced [yesterday] that it struck a deal with Fiat Chrysler Automobiles … for an additional 62,000 minivans to be deployed as robot taxis. Moreover, the two companies have also begun discussions about how to eventually sell self-driving cars to customers as personally owned vehicles.”
The deal “is the latest sign that Waymo is counting on a rapid liftoff for the service. In March, it agreed to purchase up to 20,000 compact cars for the service from Jaguar Land Rover beginning in 2019,” writes Neal E. Boudette for the New York Times.
“Both the Chrysler Pacifica minivans and the Jaguar cars will be equipped with the radars, cameras and sensors that Waymo has developed to enable the vehicles to drive themselves on public roads. Waymo plans to start its service in Phoenix, then expand to the San Francisco area and to other cities across the country,” Boudette continues.
Beyond the “radars, cameras and sensors,” the vehicles will also reportedly have the patience and fortitude to deal with crosstown traffic at rush hour.