It’s nothing but good news for General Motors and its Cruise Automation self-driving car subsidiary. A new value estimate pegs the company to potentially be worth a whopping $43 billion in the near future.
RBC Capital Markets estimated the entity could swell to the 43 with a “B’ figure after providing insight and notes to clients, Business Insider reported on Tuesday.
“For now, it appears GM’s plans are to run its own transportation network company (TNC). If they can get the technology right and execute on this plan, then when we run this scenario, we see them having a fleet of ~800,000 vehicles by 2030 driving ~58 billion miles that year. At $0.55/mile and 29% EBIT margins, we see ~$17 billion of EBITDA. In our DCF (11x exit multiple) this values Cruise at $43 billion,” Joseph Spak, RBC’s autos analyst, said.
Cruise most recently received a healthy boost from Japan’s SoftBank after it pledged a $2.25 billion investment. Part of the investment in contingent upon commercializing a self-driving car, however. GM believes it will do so in 2019.