Mary Barra, CEO of General Motors GM (Photo by Dave Pinter / Flickr)
General Motors is tightening its grip on the Cruze Autonomous Vehicle Services brand with a plan to buy the SoftBank Vision fund’s stake in the San Francisco-based technology company and inject an additional $ 1.35 billion as it approaches the launch of Autonomous Travel Service.
The carmaker from Detroit said Friday afternoon that it intends to pay SoftBank $ 2.1 billion for its stake in Cruise, and announced the plan after regular trading closes. Honda Motor & Co. is also investing in the Cruze and helping GM develop Origin’s electric van that will serve as the core model for its autonomous ride and delivery service.
“GM is leveraging the strength of its balance sheet to take the opportunity to increase its capital investment in Cruise and advance our integrated autonomous vehicle strategy,” said Mary Barra, CEO and chairman of the automaker. “Our increased investment position not only simplifies Cruz’s shareholder structure, but also provides GM and Cruz with maximum flexibility to continue the most valuable path to commercialization and the full potential of AV technology.”
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GM’s plans for Cruz have evolved in recent months, with the dismissal of former CEO Dan Amman in December 2021, and the appointment of Cruz’s co-founder, Kyle Vegat, its CTO, to the coveted position last month. Announced in February that a limited number of riders will have access to the free service.The company’s goal of removing steering wheels, pedals and other conventional controls from electric vehicles in its fleet has also progressed this month after the U.S. Department of Transportation updated safety standards for automotive vehicles.
With GM’s additional investment, Cruz has raised more than $ 10 billion since its inception in 2013. GM and its partners make a big bet on its future potential. For now, it’s kind of an economic drag on the automaker. Cruz’s operating loss was $ 1.2 billion last year, compared to an operating loss of $ 887 million in 2020.
“We continue to believe that our investment represents an extraordinary opportunity to create value for long-term shareholders,” Barra said. Shares of GM rose 2.7% to $ 44.82 on Friday.
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