General Motors Co. (IW 500/4) and Honda Motor Co. are teaming up to develop a new self-driving car as the Japanese automaker takes an almost 6% stake in GM’s self-driving car unit.
Honda will make a $750 million equity investment in GM Cruise LLC in a deal that values the GM unit at $14.6 billion, plus spend $2 billion over 12 years toward deploying the autonomous vehicles, according to a statement. The deal follows a $2.25 billion investment in Cruise by SoftBank Vision Fund in May.
The new partnership has the potential to boost the global scale of GM’s self-driving car technology and accelerate deployment of autonomous vehicles for Honda. The two automakers will develop a self-driving model that can be used in a variety of ways and will be deployed in a Cruise autonomous network.
“With the backing of General Motors, SoftBank and now Honda, Cruise is deeply resourced to accomplish our mission to safely deploy autonomous technology across the globe,” Cruise Chief Executive Officer Kyle Vogt said in the statement.
GM shares rose as much as 6% to $35.30 as of 8:22 a.m. New York time, before regular trading.
By David Welch