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Home / Business / SoftBank Fund invests $ 2.25 billion in G.M's Driverless Unit

SoftBank Fund invests $ 2.25 billion in G.M's Driverless Unit



Self-driving cars have increasingly flowed into visions of the automotive future, and a major new investment is the recent signal that such a moment is imminent.

A SoftBank Group of Japan Affiliated Fund said Thursday it was planned to invest $ 2.25 billion in General Motors' Driverless Technology division to help automakers in selected cities.

The size of the business reflects the growing confidence that commercial use of autonomous cars is in sight – despite recent setbacks at some other companies, including at least two fatal accidents that have raised questions about the safety of the technology.

"This is a new source of capital to scale this business," said Dan Ammann, GM President in a conference call. "We think this will fully fund our plan."

As part of the agreement, G.M. said it would put an additional $ 1

.1 billion of its own money into the unit, which is called G.M. Cruise Holdings and is based in San Francisco. SoftBank's investment will be made through its Vision Fund, which focuses on the technology sector.

Investors gave the motion a vote of no confidence and pushed GM's stock close to 13 percent on Thursday.

Both in Detroit and Silicon Valley As well as overseas, the urge to create a foundation for autonomous driving gains momentum. Waymo, the driverless technology company that stepped down from Google, announced Thursday that it has agreed to buy 62,000 minivans from Fiat Chrysler Automobiles for a service that will go live in Phoenix by the end of this year. [19659002] Waymo had previously agreed to buy up to 20,000 Jaguar Land Rover compact cars from 2019, creating a potential fleet of more than 80,000 driverless vehicles within three to four years.

"The volumes they commit to are a clear signal that these companies believe they have their technology very commercial," said Mike Ramsey, a Gartner analyst who follows autonomous technology.

The determination of GM and Waymo to provide travel services within months also suggests that companies using driverless cars to move ordinary people from place to place are spreading rapidly and without the expense of a driver – achieve high profits.

Mr. Ramsey remarked, "It's a completely unproven business model," with costly technology that will be in growing pain. "The first vehicles are likely to be programmed to be so cautious in traffic that cruises may take longer than people are used to," he said.

"I do not think security is of concern to most people," she said. "The time it takes to get to your destination, however, could be a diversion."

Whatever bumps are on the road, G.M. and Waymo seem to be ahead of their main rivals in the self-driving race. Uber, the ride-hailing service, suffered a setback in its efforts to develop autonomous taxis when a test vehicle hit and killed a pedestrian in March in Tempe, Arizona. This prompted Uber to stop testing self-driving cars in Arizona.

And the electric car maker Tesla and its driver assistance system Autopilot have increasingly come under fire after a Sport Utility Vehicle Model X crashed into a concrete barrier later in March. The driver who was killed had employed autopilot; Federal Security Supervisors investigate. Since then, two other Tesla cars that ran autopilot have been involved in non-fatal accidents.

Like GM, Ford Motor is racing to put self-driving cars into delivery and delivery fleets, but it has a longer timeline and hopes its car will be in production by 2021.

GM executive director Mary T. Barra said the SoftBank investment validated the direction that GM and its cruise division took. The investment gives SoftBank a 19.6 percent stake in G.M. Cruise and estimates the unit at more than $ 11 billion. That's well over the $ 1 billion that G.M. paid two years ago for the acquisition of Cruise as a startup company.

"There is no other company in the world that has the technological capabilities and experience to lead the industry at the top," said Michael Ronen, SoftBank Investment Adviser Managing Partner, SoftBank Investment Advisers

The Investment underscores the ambition and seemingly inexhaustible purse of Softbank founder Masayoshi Son. It was Mr. Son who came up with the idea to raise nearly $ 100 billion from investors from Saudi Arabia to Apple for the Vision Fund today one of the biggest and boldest investors in technology companies.

Reflecting on the personality of Mr. Son, SoftBank and the Vision Fund are known for quickly investing in companies with products critical to the future of technology. They were prepared to invest large sums of money in early start-ups with huge valuations, which displaced other potential investors.

With the G.M. Cruise Investment has pushed SoftBank further into the automotive sector. His last direct investment in a self-propelled start-up was last year, when co-led a round of financing for Nauto, a manufacturer of sensors for autonomous vehicles.

Ride-Hailing was a major focus on SoftBank with investments in Uber, Didi Chuxing from China, Ola from India, Grab from Singapore and 99 from Brazil.

In GM SoftBank relies on a competitor who has already made significant progress. The automaker is awaiting clearance from the United States Department of Transportation to begin operation of fully autonomous cars in 2019 in a commercial ride-hailing service.

At that time, the company said its vehicle, the Cruise AV, was on a standard assembly line as soon as approval was granted by the federal government and indicates where the vehicles are operated. Probable locations for the first operations are San Francisco and Scottsdale, Arizona, where Cruise is already conducting tests.

Waymo, on the other hand, does not intend to make cars, but relies on partners to produce vehicles that he will equip with sensors, radar, and other technology.

One unit of Google's parent company, Alphabet, has been operating self-driving for almost a decade Technology and focuses on four possible business lines. In addition to the car service it intends to launch, the company plans to place its autonomous driving technology in trucks and delivery vehicles, and aims to license its technology to automakers such as Fiat Chrysler. It sees a potential fourth business line in driverless shuttles that can transport drivers to public transit systems.

The company expects to purchase Pacifica minivan for its service this year. They are manufactured at a Fiat Chrysler plant in Windsor, Ontario, and equipped with self-propelled technology at a Waymo technical center in Novi, Michigan.

Waymo gave no details on how many minivans are to buy this year or next (19659002) The companies said Thursday that they are in talks about licensing the Waymo technology for Fiat Chrysler, leaving the automaker At some point self-driving vehicles can sell to consumers.


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