During the General Motors Q3 2018 earnings call on Wednesday morning, CEO Mary Barra and CFO Dhivya Suryadevara went over the company’s $2.5 billion profit, as well as costs earmarked for the year. During the 45-minute investor analyst call, it’s understood that General Motors will be absorbing around $1 billion this year in commodities tariffs from China, while another $1 billion will be shelled out this year for its ongoing AV program happening in San Francisco. Barra said it would also “be great” if the team came in under budget, though it’s not expected of them.
Costs associated with the $1 billion Cruise Automation budget allocated from General Motors for 2018 includes hiring more engineers, though it’s not immediately clear if it’s to hire additional staff or to replace unforeseen departures. Otherwise, it’s aggregated towards continued development of the Cruise AV program, accumulating miles, and further data collection.
As General Motors will front $1 billion of its own money for Cruise Automation, SoftBank announced an additional $2.3 billion commitment into the self-driving vehicle program, and acquired 19.6 percent of the Silicon Valley company in the process. SoftBank has spent billions of dollars around the world to invest in various self-driving car companies. They include Uber, and major players in China and India.The deal with GM Cruise is uniquely special, as SoftBank gains now gains access to a vehicle manufacturer. Should everything go according to plan, the SoftBank investment opens up the potential for the Japanese multinational conglomerate to build self-driving cars for various global services, and eventually to even weave in other companies SoftBank has invested in around the world.
In addition to the SoftBank investment, Honda also joined General Motors as a strategic partner in autonomous vehicle development. Honda will invest $2 billion over 12 years into Cruise Automation with $750 million in equity up front, announced back on October 3, 2018. The investment brings the value of Cruise Automation to an estimated $14.6 billion.