"Our Cruise and GM teams together have made tremendous progress over the last two years", Mary T. Barra, GM's chairman and chief executive, said in a statement. GM will also invest $1.1 billion in GM Cruise upon closing of the transaction. The investment from Softbank will allow Cruise to advance its development of autonomous vehicles as well as giving the Japanese giant an nearly 20% share of the company.
Softbank will receive a 19.6 percent stake in GM Cruise in exchange for the investment, which puts its market value at $11.5 billion, while General Motors will retain ownership of the rest of the LLC. At the time that Cruise AVs are ready for commercial deployment, the Vision Fund will complete the second investment of $1.35 billion, subject to regulatory approval.
Ultimately, SoftBank will take a almost 20% equity share in Cruise, which has been operating as a stand-alone GM unit.
Cruise, from December 1, 2016, to November 30, 2017, racked up 131,676 test miles on San Francisco streets in 94 Cruise AV cars, which are based on the Chevrolet Bolt EV. Cruise is targeting sometime in 2019 for the first examples of its steering wheel-free Cruise AV to leave the automaker's Orion Township, Michigan, assembly plant.
Cruise, which was purchased by GM in March 2016 for $581 million after the San Francisco-based startup had received more than $18 million in venture capital funding at a valuation of roughly $90 million.
Softbank will personal about 20% of a three way partnership that has been set as much as convey GM's self-driving know-how to market. Ronen also praised Cruise's swift pace of development and approach to safety along with GM's ability to produce autonomous vehicles at scale, helping to seal the deal.
The company sells cars, crossovers, and trucks to consumer retail dealers, as well as to commercial fleet customers, daily rental vehicle firms, governments, and leasing companies.
"I might anticipate Softbank could turn out to be the conduit to each feed GM automated automobiles into these different regional [ride-hailing] platforms and to assist GM get a foothold into a few of these markets with a homegrown [ride-hailing] answer", mentioned Sam Abuelsamid, a transportation analyst with Navigant Analysis, in an electronic mail.
SoftBank acquired a 15% stake, while the investors held about 3%.
A federal filing detailing the SoftBank Vision deal does address the potential for an initial public offering for GM Cruise. They are slated for mass production next year. The cars will be start production at GM's Orion Township plant in MI next year, though it isn't clear yet where they will be deployed.