Economy

SoftBank to sink $2.25 bil into GM autonomous car unit

SoftBank to sink $2.25 bil into GM autonomous car unit

GM will also invest $1.1 billion in its self-driving business as part of the deal, which values GM Cruise at $11.5 billion.

It gives GM funds for wide-scale deployment of self-driving cars, which GM aims to roll out next year.

General Motors stock was up over 10 percent in Thursday morning trading following the SoftBank news.

The deals, and other ongoing negotiations, show that the technology is authentic and it's accelerating.

Shares of General Motors Co. are up more than 10 percent this morning following the news that SoftBank Group Corp.is set to invest a staggering $2.25 billion into its Cruise self-driving vehicle group.

"Strategic partnerships, such as the one we have with Waymo, will help to drive innovative technology to the forefront", Fiat chief executive Sergio Marchionne said. That raises the possibility that personal vehicle ownership won't die if robotaxis become ubiquitous. GM will launch self-driving cars without a steering wheel or pedals.

The company sells cars, crossovers, and trucks to consumer retail dealers, as well as to commercial fleet customers, daily rental auto firms, governments, and leasing companies.

"This gives GM Cruise the capital necessary to commercialize at scale", GM CEO Mary Barra told reporters at a briefing in Detroit. At that point, Softbank would own about 20% of GM Cruise. The stock closed Thursday up almost 13 percent at 42.70.

More news: China Will Cut Import Tariffs on Consumer Goods

It appears highly unlikely that GM will be able to push for retail-saleable new vehicles with fully automated drive tech by anywhere near that timeframe, but a ride-hailing service or other select-location deployment may be possible.

SoftBank will first release a $900 million tranche of investment along with GM's own contribution.

Ford Motor Co (F.N) and BMW (BMWG.DE) both plan to deploy self-driving cars in 2021; Tesla Inc (TSLA.O) has talked about creating a network of self-driving cars and Uber says it is sticking with a development effort despite an accident in which its self-driving auto killed a woman in Arizona.

The announcements keep the front-runners on pace to start carrying passengers within the next couple of years in small-scale operations in a few metro areas, Abuelsamid said. GM jumped the most since the carmaker's November 2010 IPO. The technology fund holds significant stakes in several major ride-hailing platforms that could help GM develop self-driving app-based services.

"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, Michael Ronen, managing partner of SoftBank Investment Advisers said during a conference call with reporters Thursday".

Both GM and Ford have tie-ups with Uber's rival Lyft.

"Softbank can become a conduit for GM into all these different companies that GM doesn't now have a relationship with", Abuelsamid said.


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