Honda Motor Co. is expected to invest a sum of $2.75 billion in General Motors and Cruise’s autonomous vehicle operations. Reports suggest that with the investment, the Japanese automaker will receive a 5.7 per cent stake in GM Cruise LLC.
The investment agreement signed between the two companies includes an immediate $750 million and another $2 billion for development and deployment of autonomous vehicles over the next 12 years.
General Motors CEO Mary Barra stated that Honda will look over the operations of the collaborations and provide Cruise with additional engineering, design and technology expertise for the company’s “global reach and the ability to deploy at-scale.”
“It will really expand Cruise’s leadership in the development and deployment of autonomous technology,” Barra told reporters on Wednesday at the company’s technical centre in suburban Detroit.
Cruise, which was valued at close to $11.5 billion in May after SoftBank Vision Fund announced an investment of $2.25 billion, is now valued at $14.6 billion. SoftBank received a stake of 19.6 per cent in GM Cruise which includes Cruise and Strobe Inc., a LIDAR company GM acquired in October 2017.
This news comes roughly nine months after GM announced its plans to launch public ride-hailing services with autonomous vehicles with no manual driving controls such as steering wheels and pedals starting in 2019.