GM shares jumped higher in the US Thursday following news that Japan’s SoftBank has agreed to invest $2.25 billion into Cruise, the US carmaker’s autonomous vehicle unit. The Japanese bank will also invest a further $1.1 billion into GM’s Cruise, once this investment agreement has completed.
GM shares surged 12.87% to close at $42.70, in the US Thursday. The stock is a little in the red in out-of-hours activity. Meanwhile, SoftBank shares ended the Friday Asian trading session marginally in the red.
GM’s self-driving commitment
GM has been a long-time advocate of self-driving technology and this latest investment from the SoftBank Vision Fund is set to help it achieve its self-driving safety and development ambitions.
“Our Cruise and GM teams together have made tremendous progress over the last two years,” said GM Chairman and CEO Mary Barra. “Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion.”
GM’s President was also upbeat on the news.
“We’re excited to be joining forces with a tech leader who shares our belief that AV technology will change the world,” GM President Dan Ammann said. “We look forward to partnering with SoftBank as we work toward deploying this technology safely and in massive scale.”
SoftBank’s GM Investment plan
The investment from SoftBank’s Vision Fund is set to be made in two tranches. The first, of $900 million, will be made once the agreement has been finalised. Then, the second tranche of $1.35 billion will be made once the Cruise automatic vehicles are ready “for commercial deployment”.
The deal will also give SoftBank a 19.6% share in GM Cruise.
“GM has made significant progress toward realizing the dream of completely automated driving to dramatically reduce fatalities, emissions and congestion,” said Michael Ronen, managing partner, SoftBank Investment Advisers.
“The GM Cruise approach of a fully integrated hardware and software stack gives it a unique competitive advantage. We are very impressed by the advances made by the Cruise and GM teams and are thrilled to help them lead a historic transformation of the automobile industry,” Ronen added.