Why did GM buy cruise automation
Cruise Automation, GM's subsidiary focused on manufacturing autonomous vehicles, will have a major cash infusion this year with SoftBank Vision Fund pledging a $ 2.25 billion investment.
“It's a very historic day when we look to the future of personal mobility. We are excited to partner with Softbank, ”Mary Barra, GM CEO, said. "We are 100 percent committed to this task and creating safe, autonomous vehicles on a large scale."
Softbank Vision Fund is a prominent tech investment firm based in Tokyo, and the deal gives them an almost 20% stake in GM Cruise.
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"GM has made significant strides toward realizing the dream of fully automated driving, drastically reducing deaths, emissions and congestion," said Michael Ronen, managing partner, SoftBank Investment Advisers. “The GM cruise approach, which is a fully integrated hardware and software stack, gives it a distinct competitive advantage. We are very impressed with the progress made by the Cruise and GM teams, and we look forward to helping you lead a historic transformation in the automotive industry. "
The offer is contingent on GM committing $ 1.1 billion of its own money on cruise automation. GM already had planned investments, a lot, however, and has already funneled $ 500 million into the subsidiary this year.
SoftBank's money will be in two installments. First, Cruise Automation will receive $ 900 million and the rest will be handed over when the vehicles are ready for commercial deployment.
A version of this story originally appeared on GM Inside News
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