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General Motors is getting a $2.25 billion investment from SoftBank Vision Fund for its self-driving car division to help meet its goal of bringing self-driving vehicles to the market in 2019.
Japanese tech investor SoftBank will put $2.25 billion in GM Cruise Holdings and GM will invest $1.1 billion, the automaker said Thursday.
The investment puts GM a step closer to ride-hailing app Uber, which is one of SoftBank’s biggest investments. GM already has a partnership and investment in Uber’s archrival, Lyft.
It was not immediately clear whether the SoftBank investment would affect GM’s alliance with Lyft.
GM’s stock jumped 7.5% to $40.77 in pre-market trading.
GM CEO Mary Barra told reporters that GM has a lot of options in terms of ride-sharing and it has not made a decision yet as to how to take the technology to market. She said on a separate conference call that the company could partner with others or go it alone.
“We are demonstrating our commitment to that vision” of “zero crashes, zero emissions and zero congestion,” Barra said.
Michael Ronen, managing partner of SoftBank Investment Advisors, said on the conference call that “no other company in the world” has similar self-driving car prowess as GM.
GM’s 2016 acquisition of Cruise Automation will be remembered as “one of the most transformative tech acquisitions ever,” Ronen said.
The SoftBank Vision Fund investment will be made in two rounds. It will invest the first $900 million right away. When the Cruise autonomous vehicles are ready for commercial deployment, the Vision Fund will make the second investment of $1.35 billion, “subject to regulatory approval,” GM said.
SoftBank Vision Fund will own 19.6 percent of GM Cruise, and GM will own the balance. This investment process will give GM flexibility with respect to spending priorities, GM said.
GM spokesman Tom Henderson said the company’s self-driving cars will roll out first in a ride-sharing network beginning in 2019.
“Our plan is to deploy autonomous vehicles at scale in an urban environment in 2019,” Henderson said
The GM and SoftBank Vision Fund investments are expected to provide the necessary capital to reach commercialization of autonomous vehicles “at scale” beginning in 2019, GM said.
GM’s Cruise division now has about 800 employees, and another 800 general GM employees are working on self-driving cars, the company’s president, Dan Ammann, said on the conference call.
Follow Detroit Free Press reporter Jamie LaReau on Twitter @jlareauan.