General Motors is strengthening its grip on Cruise, its self-driving car arm, with a proposal to purchase SoftBank Vision Fund’s interest in the San Francisco-based tech startup and invest an extra $1.35 billion as it moves closer to establishing a self-driving transportation service.
The Detroit-based carmaker announced on Friday afternoon that it expects to pay SoftBank $2.1 billion for its interest in Cruise, with the plan to be announced after regular trading closes. Honda Motor Co. is also a Cruise investor, and it is assisting GM in developing the electric Origin van, which will serve as the foundation for its autonomous transportation and delivery service.
GM’s Cruise ambitions have evolved in recent months, with the removal of previous CEO Dan Ammann in December 2021 and the promotion of Cruise cofounder Kyle Vogt, its CTO, to the top role last month. The business is preparing to begin delivering revenue-generating rides to the general public, having announced in February that a limited number of users will initially have free access to the service. The company’s objective of eliminating steering wheels, pedals, and other traditional controls from its fleet of electric vehicles advanced this month when the United States Transportation Department amended safety rules for autonomous vehicles.
Cruise has collected more than $10 billion in total funding since its inception in 2013. GM and its partners in the venture are placing a large wager on the company’s future potential. For the time being, it is a financial burden for the carmaker. Last year, Cruise’s operating deficit was $1.2 billion, up from $887 million in 2020.