Last year, sources close to General Motors and the automaker’s Cruise Automation subsidiary said a spin-off could be in the works. The move would list Cruise Automation separately from GM on the New York Stock Exchange with hopes to cash in on the subsidiary’s value.
However, Kyle Vogt, Cruise’s chief technology officer, said he’s cautious over such an idea. He told Bloomberg in a Monday report that it’s much easier to develop a self-driving car side-by-side with GM under one roof. Additionally, the Cruise co-founder said GM has already begun to attract investment without a spin-off.
Last year, Japan’s SoftBank and Honda both pledged to invest billions of dollars as the unit reaches critical milestones. Honda also climbed aboard to help develop a self-driving car that will use Cruise’s autonomous technology.
Vogt said working alongside GM will “continue to be the case for quite some time” and it’s unclear if the automaker will ever execute a spin-off. If GM does, it may not be for years.
Analysts have cheered the potential move as a way for GM to focus on its automotive business while keeping an equity stake in Cruise. As a standalone technology company, Cruise may also be able to attract talent easier. Another analyst estimated Cruise could be worth $43 billion by 2025.
For now, the company will continue as is. Former GM President Dan Ammann stepped in as the subsidiary’s CEO this month, which placed Vogt in the CTO role. Ammann had worked closely with Cruise for years since he spearheaded the acquisition. Replacing Ammann as GM President is Mark Reuss, who retains his current role as product chief with direct oversight of Cadillac as it begins to role out a handful of new models in the coming years.