Honda Motor Co is investing $750 million in General Motors‘ self-driving car unit, with plans to commit an additional $2 billion in the coming years, in an effort to jointly develop a fully autonomous car for mass production. The partnership arrives as auto makers and technology giants scramble to plant stakes in a transportation landscape that is swiftly being reshaped by technology.
Honda will work with GM Cruise LLC to develop a purpose-built driverless car from the ground up that can be manufactured in high volumes and deployed globally. The companies are also exploring opportunities to establish a network of autonomous vehicles. Honda will invest the $750 million immediately into GM Cruise, while the $2 billion will be spread out over 12 years, the companies said Wednesday. Honda will take a 5.7% stake in Cruise as a result.
The Detroit auto maker set up Cruise as a separate business unit for further investment. Ford Motor Co. in July created a similar setup for its autonomous-vehicle business.
Honda’s decision to invest in GM’s self-driving arm reflects a culture change under way at the company. The Japanese car maker long prided itself on its engineering prowess, shunning technologies developed by outside companies. Now, Chief Executive Takahiro Hachigo has been on a deal-making spree, with particular focus on electric and autonomous vehicles.
The deal with GM’s Cruise is a surprise move for the Japanese car maker, which has been in talks to partner with Alphabet Inc.’s Waymo, a rival driverless-car firm, for nearly two years. Honda first revealed it was in talks with Waymo in December 2016 but the two companies have yet to announce concrete plans.
In a statement, Waymo said it continues to discuss opportunities with Honda, as well as other auto makers.
