Skip to main content

Honda hands GM $2.75 billion so it can get the Cruise self-driving unit moving

American Honda Motor Company and General Motors will partner on GM’s Cruise self-driving unit, arguing once again that developing safe autonomous vehicle tech is too big a task for even the largest automobile manufacturers to handle alone. In addition to $2.75 billion, Honda will also participate with engineering resources, Reuters reports.

The deal structure includes a $750 million initial payment in return for a 5.7 percent stake in the Cruise division. Honda will pay the remaining $2 billion over a 12-year period in the form of development work and fees.

Related Videos

General Motors originally purchased the autonomous car startup for a reported $1 billion in 2016.

GM is currently developing its third-generation self-driving car, named the Cruise AV, at its Orion Lake, Michigan assembly plant. The company has 100 test vehicles on the road in San Francisco. Reuters reported that General Motors CEO Mary Barra said the company would not move to other markets for testing at this time.

Commenting on the Honda investment, GM President Dan Ammann said, “The longstanding relationship we have with Honda will allow us to move very quickly in ramping up our efforts.”

Stating that GM has been “very selective” in any dealings with potential investors, Ammann also said, “we will evaluate other investment opportunities as they come along.”

“We’re moving as quickly as we can to get to the point where we can initially deploy the technology and then scale it …,” Ammann continued in a talk with analysts. “This is an effort that requires very, very significant resources to pull off.”

Honda is also in continuing talks with Alphabet’s Waymo. Referring to the announced investment in the GM self-driving unit, Honda Chief Operating Officer Seiji Kuraishi said, “This investment is based on a shared vision and their (GM’s and Cruise’s) superior technologies in this area.”

Additional funding is in the wings from Japan’s Softbank, a large investment group that, by tradition, focuses on technology infrastructure companies. In May, GM announced that the Softbank Vision Fund would invest $2.25 million in the GM Cruise Unit. At the same time, GM committed an additional $1 billion in GM Cruise when the Softbank deal is done, according to the announcement.

Notably, on Thursday, October 4, Softbank and Toyota announced a “strategic partnership to facilitate the creation of new mobility services.”

All this talk about investments and partnerships underscores the complexity and the long game of putting self-driving vehicles everyone will trust, meaning passengers, automakers, government regulators, and insurance companies.

Earlier statements by automakers including Volvo and Tesla that Level 3 and Level 4 self-driving vehicles would be available for sale by 2020 or 2021, meaning self-driving to the point where the vehicles are fully self-operational in most but not all driving scenarios, now seem overly optimistic.

Waymo and GM’s Cruise are now the two largest and most well-funded self-driving car development entities, but further partnerships involving those two companies and others are likely.

Editors' Recommendations

How to use a Tesla Supercharger: a complete guide
tesla starts opening its supercharger network to other evs

Sure, Tesla makes great cars, but one of the biggest advantages to owning a Tesla is being able to tap into its massive charging network. That means that not only can Tesla owners use all of the third-party charging stations out there, but they can also use the tens of thousands of Tesla Superchargers out there.

Of course, you might not want to use non-Tesla chargers if you don't have to, given the fact that they're so easy to use. Here's how to use a Tesla Supercharger.
How to use a Tesla Supercharger
Superchargers are among the easiest chargers to use. Here's how to do so.

Read more
Tesla invests billions in U.S. gigafactory to boost Semi production
Tesla's gigafactory in Nevada.

Tesla has announced a major plan to expand its gigafactory in Nevada.

The electric vehicle company led by Elon Musk said on Tuesday it will invest more than $3.6 billion to add two more production facilities to the site -- one that will become its first high-volume factory for its recently launched Semi truck, and another to produce its new 4680 battery cell.

Read more
2024 Polestar 2 gets a major overhaul for the 2024 model year
2024 Polestar 2

Volvo off-shoot Polestar is looking forward to an eventful year. It will begin production of the 3, its first crossover, and it will release a comprehensively updated version of the 2 sedan that's sportier than the outgoing model, more road trip-friendly, and better equipped.

The biggest visual difference between the original 2 and the new-look car due out in 2023 as a 2024 model is found on the front end. The electric sedan swaps its grille for what Polestar designers call a SmartZone that frames the front-facing camera and covers the mid-range radar used to power some of the electronic driving aids. While the shift isn't significant, it's symbolic. The grille created a visual link between the 2 and the 1, Polestar's now-retired first model; the SmartZone brings the sedan in line with the sleek-looking 3 unveiled in late 2022.

Read more