In a recent article I discussed Ford’s new division called Ford Autonomous Vehicles LLC and this article covers an update to their big rival General Motors, with their Cruise Automation business, now called G.M. Cruise Holdings (GMCH).
In a recent announcement, a fund affiliated with SoftBank, a Japanese company, has stated that they will be injecting $2.25B into GMCH with the parent company, GM, adding a further $1.1B to top up the coffers. A GM executive said in a conference call “we think this fully funds our plan”. The first $900M has been handed over with the remaining funding to proceed when GMCH have a vehicle ready for commercial use.
The fund, called the Vision Fund, specialises in investments in technology companies and GMCH is pretty much all software and hardware based, with data and sensors acting as the memory for the circuit boards to do their stuff. SoftBank’s fund has been hard at work getting a huge amount of cash from the Middle East as well as some high profile technology companies to use for this type of investment.
Despite a lot of bad publicity surrounding accidents involving Uber test cars and Tesla’s running on Autopilot, this section of the automotive business is still absorbing investment and as the tests uncover more scenarios to deal with, the technology (in theory) should be getting more reliable. I think by the time all the accident investigations are completed, the vehicles will have highly evolved systems and look nothing like today’s versions.
In a recent article on Motoring Weekly, I commented on the fact that SoftBank also own a stake in many of the bigger ride share companies and that they are waiting for autonomous vehicles to legally be used on city streets so that they can ditch the drivers, reducing the costs for each ride share company. That would mean SoftBank’s investment would increase as profits and therefore the share price went north.
I commented in that article that I felt that SoftBank’s behaviour could be construed as anti-competitive at times, certainly when they instructed competing companies (that they owned a stake in) to change their strategy or pricing model. This investment takes them a step closer to controlling the ride share market with greatly reduced operating costs.
In fact earlier this year, General Motors did apply to the US Department of Transportation to get a permit to run a driverless ride share trial next year. The cars would have no steering wheel or pedals – effectively a box with toys for the passengers. The US Government is also looking at two separate bills to wrap legislation around the use of autonomous vehicles – I suspect that is where some of the investment will end up: horse trading and lobbying various Government departments.
The industry feels it is getting close to having these cars on public roads – I just wonder if the politicians won’t delay approvals until they know that there are votes in it for them, or in the case of the current administration, discreet payments made to persuade them to make the “right” decision.