General Motors announced recently that SoftBank Vision Fund has agreed to inject $2.25 billion in its self-driving program and plans are underway to start selling the vehicles by next year. GM purchased the self-driving startup, Cruise Automation in 2016 at about $1 billion. If the deal closes, Cruise Automation will be granted $900 million and $1.35 billion once the autonomous vehicles are already in the market. Furthermore, SoftBank will have a 19.6% stake in the Cruise Automation.
Currently, SoftBank Group, based in Japan is focusing on self-driving technology, a new revolution that would completely change the transport industry, though there are various factors that have halted the process of launching the products on the market. For instance, the self-driving cars face engineering, safety, regulatory, and doubts among the prospective users.
A New Industry Focus
Previously, SoftBank invested heavily in the mobility companies including Uber Technologies Inc where it owns a 20% stake, and other ride-hailing companies including Chinese Didi Chuxing, Ola in India, Asia’s Grab, Nvidia and other firms across the globe with the anticipation that the industry will pick up faster in the near future.
The latest deal between the two companies has amazed the industry since GM is a great investor in Lyft as SoftBank is for Uber. SoftBank believes that soon, technology will displace the role of drivers and help companies cut down operating costs.
How Will It Be Governed?
Self-driving idea remains a subject of controversies across the world. There are several uncertainties about the product, which is still at the initial stages of development. For instance, it’s not clear whether the self-driving vehicles are meant for the public, or people will purchase and own them, or the services will be provided by third party companies such as Uber of Lyft.
However, with the complexity of the self-driving venture, it’s apparent that the business will not be handled by one single company. Currently, GM is jointly working with Lyft and Cruise Automation. At the same time, Lyft has also partnered with Ford to develop a ride-hail service app platform to facilitate the self-driving services.
In addition, Lyft is working on its self-driving technology platform that has stirred more interest among the industry players including Jagua Land Rover, Drive.ai, Waymo, NuTonomy, and much more.
While the rest of the automated companies prefer the partnership model, Tesla is firm on working alone. The company tried to partner with Mobiyele to develop Autopilot product but they later parted ways after a lethal crash in 2016. Tesla moved on to redesign a new version of Autopilot and it’s still operating singly.