Photo: GM
Following the financial crisis of the late 2000s, General Motors has become the quietest of the former Detroit Three. But the company is still there, and apparently still capable of taking money from various investors.
In March, GM said it would begin selling an autonomous vehicle called Cruise as soon as 2019. A tiny amount of money, by industry standards, was to be invested in the upgrading of the facilities that would be in charge of manufacturing the car, Orion Township and Brownstown.
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.
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.
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