In the race to develop the world's first safe, reliable and robust driverless ride-hailing service, General Motors and its Cruise self-driving car unit just received major backing from rival automaker Honda.
The companies announced Wednesday that Honda will invest $2.75 billion in the Cruise unit over the next 12 years, with $750 million of the investment representing an equity stake and the rest to help fund the development and deployment of the ride-hailing service.
The announcement comes just four months after SoftBank Vision Fund, which has more than $100b of assets under management and is considered the world's biggest tech fund, paid $2.25b for a 19.6 percent stake in Cruise.
Given all the separate investments in Cruise, the entity is now worth $14.6b.
GM Cruise AV self-driving car
Cruise's main rival is Alphabet Inc.'s Waymo, which will have a commercial ride-hailing service using driverless cars up and running in parts of Phoenix, Arizona later this year. While Waymo is installing its self-driving technology in existing vehicles supplied by established automakers, specifically Fiat Chrysler Automobiles and Jaguar Land Rover, Cruise will develop a purpose-built driverless car for its service. Cruise said it is developing its vehicle to serve a wide variety of use cases and be manufactured at high volume for global deployment.
“With the backing of General Motors, SoftBank and now Honda, Cruise is deeply resourced to accomplish our mission to safely deploy autonomous technology across the globe,” Cruise CEO Kyle Vogt said. “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.”
Cruise is currently testing its self-driving technology using Chevrolet Bolt EV, which the company refers to the as the AV (Autonomous Vehicle). Cruise plans to start a commercial service for the vehicles in 2019, where the public would be able to hail a ride via an app. The cars may even be devoid of a steering wheel and pedals.