General Motors Co. in Detroit today announced it is acquiring SoftBank Vision Fund 1’s equity ownership stake in Cruise, an autonomous vehicle company in San Francisco, for $2.1 billion.
In addition, GM separately will make an additional $1.35 billion investment in Cruise, replacing a previous commitment made by the fund in 2018.
“We are extremely pleased to announce GM is leveraging the strength of its balance sheet to capitalize on the opportunity to increase its equity investment in Cruise and advance our integrated autonomous vehicle strategy,” says Mary Barra, chair and CEO of GM. “We continue to believe our investment represents an extraordinary opportunity for creating long-term shareholder value.
“Our increased investment position not only simplifies Cruise’s shareholder structure, but also provides GM and Cruise maximum flexibility to pursue the most value-accretive path to commercializing and unlocking the full potential of AV technology.”
Since GM acquired a majority ownership stake in 2016, Cruise says it has made progress in self-driving cars and has played a leadership role on the pathway to commercial autonomous ridesharing and delivery.
“GM’s increased investment illustrates its commitment to Cruise and our mission of creating a better world by deploying driverless cars at scale,” says Kyle Vogt, CEO of Cruise. “Cruise will continue to operate as it does today — an independent company working alongside GM in a flexible, collaborative partnership.
“Cruise and GM’s continued partnership as well as GM’s financial strength and manufacturing scale are significant enablers and key differentiators for Cruise as we accelerate our progress and enter this next phase of commercialization.”
Last month, Cruise, via its Origin vehicle, became the first company to offer fully driverless rides to the public in a major U.S. city, its hometown of San Francisco.
The Cruise Origin is a zero-emissions, shared, electric vehicle that has been designed from the ground up to operate without a human driver. This means it does not rely on certain human-centered features, like a steering wheel or a sun visor, to operate safely. GM is manufacturing the Origin at its Factory ZERO plant in Detroit/Hamtramck.
In addition to GM’s increased investment, Cruise today launched its Recurring Liquidity Opportunity Program, which provides Cruise employees the potential for long-term share price upside as well as flexibility around share liquidity. This program is designed to keep Cruise competitive in the talent market against both public and private companies as the company enters the early commercialization phase and continues to attract and retain some of the world’s best talent.