On Wednesday, General Motors delivered a welcome piece of news. Honda will invest $2.75 billion into GM’s Cruise Automation subsidiary and partner with the U.S. automaker to build a self-driving car and work out logistics for networks of autonomous vehicles.
Bloomberg reported Wednesday that Honda had no comment on what caused its dramatic shift from Waymo to GM Cruise, but analysts believe the Japanese automaker likely felt more comfortable teaming up with GM. Honda and GM have a rather close partnership already: the two established a joint venture for hydrogen fuel cell production and partnered to develop next-generation electric-car batteries.
“It’s a big vote of confidence in General Motors and Cruise and their technology,” said Mike Ramsey, auto analyst for researcher Gartner Inc. “Every major car company is working on this technology. This really seems to separate GM and Google from the pack.”
Analysts believe Honda may have chosen GM over Honda for a more important reason: Google’s reputation. Waymo is still owned by Google’s parent company, Alphabet, and the company’s subsidiaries have a record for acting like a competitor with partners. The report cites Google’s Android operating system as an example. Smartphone companies receive the operating system for free, but Google reaps the profitability of the pre-installed software, which leaves smartphone companies left to thinner profit margins.
Analysts said automakers may not want to be on the losing side of the battle should Waymo try to control too much in a partnership. Ramsey added Google can be very difficult to work with because “they want everything” and Honda may have felt like a “junior position” to them.
GM’s language in the announcement appears more collaborative, specifically when it comes to developing a future self-driving car. Neither automaker knows what kind of car they will build, but it won’t be the same as the current Chevrolet Bolt EV-based prototypes testing. The partnership also does not affect GM’s timeline to launch a ride-sharing service with self-driving cars sometime next year.
Comments
Honda was in talks Waymo so they clearly saw Waymo’s value…Far all we know Cruise offered Honda a better offer than Waymo; however, if GM and Honda are both going to jointly develop a vehicle and not just the EV tech, clearly GM is the better choice…
https://finance.yahoo.com/news/why-honda-dumped-waymo-gm-030926691.html
“Waymo wasn’t willing to share the substantial technology it had already developed to run autonomous vehicles, and was seeking to cut a deal that would focus on Honda providing the cars, according to two people with knowledge of the matter”