Honda buys stake in GM Cruise self-driving unit, to invest $2 billion
1 min read . Updated: 03 Oct 2018, 08:04 PM IST
PremiumHonda is paying $750 million upfront for the minority stake in Cruise and will invest another $2 billion over 12 years
Detroit/Bengaluru: Honda Motor Co Ltd will invest $2 billion and take a 5.7% stake in General Motors Co’s Cruise self-driving vehicle unit, extending cooperation between the two automakers in a technology that has enormous costs and risk but no market-ready products.
Honda is paying $750 million upfront for the minority stake in Cruise and will invest another $2 billion over 12 years, the companies said on Wednesday. Honda, GM and Cruise will jointly develop self-driving vehicles for deployment in ride services fleets around the world.
GM shares were up more than 5% in pre-market trade.
In May, Japan’s SoftBank Group said it would invest $2.25 billion and take a 19.6% stake in Cruise.
Honda’s investment values Cruise at $14.6 billion. GM acquired the San Francisco-based startup in March 2016 for a reported $1 billion.
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.
GM Cruise and Alphabet Inc’s Waymo are often described as leading the pack of technology and auto companies competing to create self-driving cars and integrate them into ride services fleets.
Ford Motor Co and BMW have said they plan to deploy self-driving cars in 2021.
“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," Cruise Chief Executive Kyle Vogt said.
The latest deal extends a partnership between Honda and GM that includes joint development of electric vehicles with hydrogen fuel cells that are expected to go on sale in 2020. In June, Honda also said it would buy advanced batteries from GM in a move that could significantly reduce the cost of future electric vehicles at both automakers after 2020.
At the Paris Auto Show on Wednesday, the heads of Daimler AG and Renault said the two companies may expand their cooperation to batteries, self-driving vehicles and mobility services.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
