Japan's SoftBank Dumps Cash Into America's Autonomous Vehicles, Sets GM Deadline for 2019

Matt Posky
by Matt Posky

Several months after procuring a large ownership stake in Uber, SoftBank has placed $2.5 billion into General Motors’ self-driving program. The automaker intends to begin deploying autonomous vehicles next year and CEO Mary Barra says her company will invest $1.1 billion of its own funds into the effort to ensure the timeline is adhered to.

Thanks to the hefty investment from SoftBank’s Vision Fund, the Japanese holding company now owns roughly 20 percent of General Motors’ tech subsidiary, known as Cruise Automation. While tech firms and automakers have been driving hard to surpass each other in terms of autonomous development for years, GM currently appears to have the most riding on the hardware.

The long-term strategy for General Motors sees ride sharing, taxi services, and personal data acquisition as a huge financial opportunities. By launching 13 million connected cars over the next several years, the company thinks it can accrue wealth through an in-car digital marketplace that sells apps and services. Afterward, it can collect driver data (purchasing choices, driving habits, etc.), sell it off to whoever wants it (including insurance companies), and issue in-car advertisements — something it’s already pursuing with help from IBM’s Watson.

However, the keystone to all of this is self-driving cars. The less time a driver has to spend looking at the road, the more time they can spend interacting with the digital marketplace and engage with GM’s carefully chosen partners. Essentially, General Motors can continue making money as a car manufacturer while running a healthy data-focused side business.

It’s something other automakers are considering and actively working on, but GM is making the most noise. Wall Street responded favorably following the company’s initial announcements in 2017, but the automaker’s stock price has been comparatively herky-jerky through 2018.

According to Bloomberg, $1.35 billion of SoftBank’s investment is conditional on the carmaker’s autonomous-driving arm being able to deploy vehicles next year. With so much riding on Cruise’s success, it seems unlikely General Motors would agree to a deal without being highly confident it can deliver.

News of the announcement drove GM’s share price up over 10 percent on Thursday. Assuming it maintains that trajectory, it would result in the largest single-day increase of automaker’s shares in almost a decade.

While SoftBank’s investment is the biggest news in the autonomous driving sphere, it’s not the only story. Waymo announced it will add roughly 62,000 Chrysler Pacifica vans to its fleet. The company intends to expand its driverless ride-hailing program into new markets after piloting it in Phoenix, Arizona, this year.

[Image: General Motors]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Redgolf Redgolf on Jun 01, 2018

    only if ALL cars are autonomous! all autonomous vehicles must be equipped with multiple restraints, helmets, and crash proof cocoon systems and 2 car lengths distance kept per 10 mph of speed! still wouldn't want to be sitting in one broken down on I 24 going to or from Nashville!

  • "scarey" "scarey" on Jun 01, 2018

    Does anyone remember the cop cars in the movie Demolition Man ? Auto drive with a foam system to protect the driver and passengers in case of a crash. "Take this job and SHOVEL it"".

  • Dartman Nice job Healy! A genuine “truth about cars” instead of troll bait.
  • Charlie Oh by the way the steering is so rusted that it actually is loose, and the transmission makes strange whirring and scraping sounds. The car is falling apart from rust.
  • Charlie 78 for my ‘09 Mercury mariner. It has 850k miles on it and leaks oil. It has 9 scratches, deformed bodywork, and severely rusted frame and suspension. When you stand on the duct taped rear bumper, the suspension creaks loudly. Also it has a loud vibration and rod knock, and the driver rear window is falling out. Ps. Don’t they normally have a roof rack and display screen? Cause mine doesn’t.
  • Honda1 More disposable junk from Hyundai.
  • Analoggrotto The ORDER BOOKS in Australia have netted 300% above projection. Australia is so awesome and they are embracing the Telluride DIesel to overtake the Prado. Pentagon data, and eATPs rule the discussion, bar none. Toyota fans can go home with their sorry little turbo 4 cylinder.