October 3rd, 2018 by Steve Hanley
One of the side effects of the confluence of electric and autonomous cars is likely to be a consolidation of car companies into a few super manufacturers. “The Ultimate Driving Machine” may become an irrelevant advertising slogan in a world filled with self-driving cars. Take the latest move by Honda, for example.
Here is a company that has hardly any electric cars in its product mix, but it has just agreed to invest a huge chunk of money — $2.75 billion, to be exact — in Cruise, the autonomous driving company gobbled up by General Motors last year. Is it a sign that a Honda/GM linkup is on the horizon?
$750 million of that investment will happen immediately. The remaining $2 billion will be provided over the next 12 years. Honda’s involvement with Cruise comes just 5 months after Softbank put $2.25 billion into the Cruise Automation pot. The company’s valuation now stands at more than $14 billion.
What sort of vehicle are GM and Honda cooking up? Good question. Kyle Vogt, founder and CEO of Cruise, tells TechCrunch it will be “innovative, space efficient, and multi-purpose.” He went on to say, “When you have the chance to design a vehicle from the ground up, we’re not limited to thinking from the perspective of ‘OK, there’s an autonomous vehicle that looks and feels like an existing vehicle, what can we do with it?’ It lets us invert the problem and think from first principles of what we can do with a vehicle that’s built from scratch.”
And when will all this take place? “Our intent is to go pretty quickly on this as we have with everything else,” Vogt said. Make of that what you will. Dan Ammann, president of GM, also refused to be drawn on what the new car might look like, saying only the “next evolution in the future of transportation,” will be produced at high volume for global deployment.
“This is the logical next step in General Motors and Honda’s relationship, given our joint work on electric vehicles, and our close integration with Cruise,” GM CEO Mary Barra said in a statement. “Together, we can provide Cruise with the world’s best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology — while they move to deploy self-driving vehicles at scale.”
Honda, GM, and Cruise say they plan to “explore global opportunities for commercial deployment of the Cruise network.” Cruise claims it will begin offering a commercial ride-hailing service using autonomous Chevy Bolts in 2019, presumably in San Francisco where Cruise has its headquarters. It is already testing its self-driving cars on public roads in the Bay area.
This is not the first collaboration between Honda and GM. The two companies are already working together to perfect hydrogen fuel cells for automotive use, a project that has a 2020 target date. Honda has also agreed to battery cells and packs supplied by GM for any electric vehicles built for the North American market.
The two companies have many decades of experience building automobiles, which should stand them in good stead when it comes to manufacturing vehicles in the future. The “x factor” in all this is Tesla. While it is the new kid on the block, it is setting sales records and already equips every car it makes with the hardware needed for fully autonomous operation, according to the company.
With the Tesla Model 3 now one of the best selling cars in America and production for all Tesla vehicles trending up sharply, it might take every bit of experience Honda and GM can muster to compete with the upstart from Silicon Valley.
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