- General Motors‘ self-driving car unit, Cruise, is getting a $US2.25 billion investment from Japan’s SoftBank.
- The deal values Cruise at $US11.5 billion – almost 20 times what GM paid for it in 2016.
- GM surged more than 10% after the investment was announced.
- Follow General Motor’s stock price in real-time here.
Shares of General Motors surged more than 10% in early trading Thursday after Japan’s SoftBank tech fund announced a $US2.25 billion investment in the company’s self-driving car unit known as GM Cruise.
The investment will come in two stages of $US900 million immediately and another $US1.35 billion once Cruise’s autonomous vehicles are ready for commercial deployment, GM said. It will also invest $US1.1 billion of its own money in cruise when the deal closes.
“GM has made significant progress toward realising the dream of completely automated driving to dramatically reduce fatalities, emissions and congestion,” Michael Ronen, a managing partner at SoftBank Investment Advisers, said in a press release.
“The GM Cruise approach of a fully integrated hardware and software stack gives it a unique competitive advantage. We are very impressed by the advances made by the Cruise and GM teams, and are thrilled to help them lead a historic transformation of the automobile industry.”
Cruise, which was purchased by GM in March 2016 for $US581 million after the San Francisco-based startup had received more than $US18 million in venture capital funding at a valuation of roughly $US90 million. SoftBank’s investment values Cruise at $US11.5 billion.
Last September, Cruise said its first self-driving car was ready for production, and that it had built 50 cars – accompanied by human drivers – for test rides near its Silicon Valley headquarters. The cars will be produced at GM’s plant in Orion, Michigan using parts from the Chevrolet Bolt.
Commercialization, according to GM President Dan Ammann and Cruise CEO Kyle Vogt, will arrive in 2019.
GM’s stock price has declined 2.6% since the beginning of 2018 amid fears of a trade war stoked by President Donald Trump.
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