Japan is bringing big money to self-driving car partnerships: General Motors has struck a new alliance with Honda to produce an autonomous vehicle through its Cruise Automation subsidiary.
The deal includes a $750 million investment in Cruise by Honda, which alongside a recent cash influx from the Japanese tech investors at Softbank, leaves the unit valued at $14.6 billion. Honda will also contribute $2 billion towards the cost of developing the new vehicle.
Cruise CEO Kyle Vogt described the future vehicle as “an innovative, space-efficient autonomous vehicle that delivers an exceptional experience and minimizes congestion on crowded city streets” in a Medium post published today (Oct. 3)
Automotive newcomers like Uber, Alphabet’s Waymo, and Tesla are all developing self-driving technology, as are major automakers like Ford and Volvo. Many are working together in an elaborate sea of alliances that this new tie-up complicates even further.
Tesla and erratic CEO Elon Musk’s struggles with production remain top of mind in the sector, as well as others’ setbacks on building reliable autonomous technology, including several fatalities. Cruise’s initial focus will be on the machine learning and sensor packages necessary for a robotic car, but in Vogt’s post, he wrote about taking on car manufacturing, and seemed to reference his competitors’ struggles.
“A rule of thumb in the auto industry is that a new production vehicle takes four years and about a billion dollars to design and bring to market,” Vogt writes. “That’s assuming you have an existing assembly plant (if not, add another billion dollars) and an experienced team ready to spring into action. Most companies don’t, so it takes much longer…So we made the decision a couple of years ago to shave years off our timeline and build our first wave of self-driving cars by starting with GM’s existing proven electric vehicle platform.”
GM has said it hopes to deploy fleets of self-driving cars onto city streets in 2019, but the company was not able to offer more specifics except to say they would wait for the “right level of safety performance.”
Beyond the technical and manufacturing challenges ahead, self-driving cars have faced regulatory challenges both in testing their vehicles safely and in scaling them up as real services on city streets.