Thursday's announcement that GM managed to attract major investment from the SoftBank Vision Fund is proof of the fact that, once again, the company was placing the cart in front of the horses, as it really did not have the money to come true with the promise.
Thankfully, SoftBank stepped in and said it would give GM $2.25 billion to support the development and large-scale production of the model. SoftBank, a Japanese conglomerate, would in return receive a 19.6-percent equity stake in GM’s Cruise division and the promise that GM would also chip in $1.1 billion upon closing of the transaction.
By all intents and purposes, GM bets everything on the upcoming Cruise AV. If it works, it might pull the carmaker out from the outskirts of the industry. If it doesn’t, things might take an ugly turn for the former auto giant.
The biggest bet GM is making is the fact that, unlike all other carmakers, goes straight for Level 5 autonomy. That means a car with no steering wheel, no pedals, and no manual controls.
It not yet clear what market segment GM targets with the Cruise AV – perhaps car sharing, or delivery. Even so, according to a study by the Center for Automotive Research (CAR), Level 4 and 5 systems will constitute only 4 percent of new vehicles sold on the global market by 2030, making GM’s idea a high-risk one.