General Motors (GM 34.58, +1.27) climbed after
announcing a partnership to develop autonomous vehicle technology in
collaboration with Honda Motor (HMC 29.59, -0.87).
Over the past few years, major automakers and large technology companies like Alphabet (GOOG 1201.00, +0.89), NVIDIA (NVDA 285.63, -0.85), and Intel (INTC 49.71, +1.61) have been in a race to develop full self-driving technology. While just about every player has been able to make some progress, it remains unclear who will be the first to unveil level 5 autonomous technology.
There is no certainty that this major undertaking will produce technology that is accepted by the market, but major automakers have been unwilling to sit out the race. Instead, they have been securing partnerships with technology companies to keep themselves at the forefront of the development. For instance, Ford (F 9.30, +0.10) and ride-sharing company Lyft agreed to share data one year ago while Volkswagen and Apple (AAPL 231.50, +2.22) signed a partnership deal in May.
The agreement between the Cruise unit of General Motors and Honda calls for the funding and development of a purpose-built autonomous vehicle that can be manufactured at high volume. The two parties will also explore opportunities for commercial development of the Cruise network.
Honda Motor has agreed to invest $2.75 bln in the venture. The company plans to invest approximately $2 bln over 12 years while also making a $750 mln equity investment in Cruise. GM's Cruise received a $2.25 bln investment from SoftBank's Vision Fund in June and is currently valued at $14.60 bln.
- OUR VIEW
- LEARNING CENTER