Honda Invests Big in GM's Cruise Self-driving Arm

Steph Willems
by Steph Willems
honda invests big in gms cruise self driving arm

Honda likes what GM Cruise LLC is doing, and wants it to have some cash. On Wednesday, the Japanese automaker announced it would invest $2.75 billion in the GM-owned autonomous driving company, hoping to reap some of the reward of its purpose-built self-driving car.

While still under development, Cruise claims the vehicle — free of such things as a steering wheel or pedals — will arrive in 2019. Already, the company has a fleet of modified Chevrolet Bolts operating as testbeds for the technology. Once unveiled, GM Cruise plans to use the vehicle in a new ride-hailing service while also making it available to others, potentially funneling big bucks into its parents’ coffers. Honda’s, too.

Honda’s investment sees the automaker hand over $750 million up front, with the rest of the sum changing hands over the course of 12 years. The $2 billion will go towards development and mass production of the vehicle.

In a joint statement, the automakers said the investment will aid in the creation of a vehicle “that can serve a wide variety of use cases and be manufactured at high volume for global deployment.” For its contribution, Honda nets a 5.7 percent stake in GM Cruise LLC, which now carries a valuation of $14.6 billion.

The two automakers also announced they “will explore global opportunities for commercial deployment of the Cruise network.”

Alternative revenue streams are what Cruise is all about. The automaker purchased the Silicon Valley startup in 2016 for $581 million, tasking it with the development of GM’s own self-driving car. The unit purchased LIDAR maker Strobe a year later. Earlier in 2018, Cruise’s fortunes rose after a $2.25 billion investment from the Softbank Vision Fund — an investment that garnered the firm a 19.6 percent stake.

“The Honda partnership paves the way for massive scale by bringing a beautiful, efficient, and purpose-built vehicle to our network of shared autonomous vehicles,” said Cruise CEO Kyle Vogt in a statement.

As for the vehicle under development, progress is apparently well advanced. In a statement reported by Automotive News, GM president Dan Ammann, who oversees Cruise, said the car is the first purpose-built production vehicle that is “free from the constraints of having to think about vehicle design and having a driver at the wheel, and all the traditional approaches to that.”

Forgive this writer for feeling a little concerned about his driving future.

[Images: General Motors]

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  • Mjz Mjz on Oct 03, 2018

    I will NEVER EVER ride in an autonomous vehicle that does not have redundant controls. NEVER EVER.

    • Brn Brn on Oct 03, 2018

      I'd consider it. Not yet, but someday.

  • Tedward Tedward on Oct 04, 2018

    I'm with mjz. There is no upside to removing the physical controls. The way I see it there are only two plausible reasons for that design change, and they are pr shock value and cost savings. Neither, obviously, is sufficient justification to remove the most important failsafe a self driving car could have, the squishy grey computer that has been handling this kind of math with ease for decades. I won't get in one and I will have an angry response to seeing them on the street. It makes me think poorly of GM and Honda that they would participate in a program or business model set up this way.

  • MelanieRichardson GOOD
  • El scotto @jwee; Sir, a great many of us believe that Musk is somewhere (pretty high) on the spectrum and move on.I work on the fringes of IT. Most of my presentations get picked over extensively and intensely at meetings. I'm smart enough to know I'm not that smart and willingly take advice from the IT crew. I bring them Duck Doughnuts too. We also keep a box of Crayolas in the meeting room.At one meeting an IT guy got way into the details of my presentation, the meeting went long as we discussed my target audience. Same IT guy insisted it was a disaster and would fail miserable and that I was stupid. Yeah, F-boms get dropped at our meetings. I finally had enough and asked if he was such an expert, did he want to stand up in front of 30 senior executives and give the presentation? His response was a flat "NO". He got the box of Crayolas. For you non-military types that means shut up and color. Musk is the same as that IT guy, lots of gyrations but not much on follow-through. Someone just needs to hand him a box of Crayolas.
  • FreedMike The FJ Cruiser would be a better comeback candidate. The gang back at Toyota HQ must be looking at all those Broncos flying off Ford lots and kicking themselves.
  • Tassos 2015 was only 7 years ago. $58k is still a whole lot of $ to pay for a vehicle. FOrtunately one can buy a flagship vehicle with great active and passive safety for half this amount, if one does the SMART thing and buys a pre-owned luxury flagship vehicle. they have historically been SCREAMING BARGAINS. A breadvan on stilts SUV, wether the more compact Macan or the more bloated Cayenne will never pass as a Flagship Vehicle. No matter how well it drives or how reliable it suprisingly is. It still is a breadvan on stilts.
  • Sean Ohsee Bring back the 100 series and its I6 diesel.
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