Late-comer Honda invests $2bn in GM’s self-driving unit
Bengaluru — Honda Motor will invest $2bn and take a 5.7% stake in General Motors’ (GM’s) Cruise self-driving vehicle unit, extending co-operation between the two carmakers in a technology that has enormous costs and risk but no market-ready products. Honda, which has lagged behind many of its rivals in developing self-driving vehicles, is paying $750m upfront for the minority stake in Cruise and will invest another $2bn over 12 years, the companies said on Wednesday. Honda, GM and Cruise will jointly develop self-driving vehicles for deployment in ride service fleets around the world. GM shares were up 3.5% in opening trade.
In May, Japan’s SoftBank Group said it would buy a 19.6% stake in Cruise for $2.25bn. Honda’s investment values Cruise at $14.6bn — about a third of GM’s market cap, $48.5bn. GM acquired the San Francisco-based start-up in March 2016 for a reported $1bn. In comparison, analysts have pegged the value of Alphabet’s Waymo self-driving unit as high as $175bn. ...