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GM’s Cruise Is Valued At $19 Billion — Does That Make Any Sense?

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Published on June 6th, 2019 |

by Zachary Shahan

GM’s Cruise Is Valued At $19 Billion — Does That Make Any Sense?

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June 6th, 2019 by Zachary Shahan

The self-driving vehicle startup Cruise that GM acquired in 2016 was recently valued at $19 billion after another round of investments.

That puts Cruise’s valuation at more than half the value of Tesla, and 38% the value of GM as a whole (as of this moment).

That implies, of course, that certain portions of the investment world expect a lot from Cruise, and think it is well on its way to a promising future.

I find the whole thing tremendously interesting. I understand that some auto industry players think Cruise as the perfect approach to autonomous driving, but others think it has fatal flaws and will never outcompete what Tesla is developing. Fine and good — there are differences of opinion in the auto world, and more specifically in a burgeoning new new industry that most consider to be the future. But it still blows my mind a little bit that very little money is invested in the idea Tesla is the world’s autonomous driving leader while Cruise is being valued at $19 billion.

First, though, a few more details on the news. GM raised “an equity investment of $1.15 billion from a group comprising institutional investors, including funds and accounts advised by T. Rowe Price Associates, Inc., and existing partners General Motors, SoftBank Vision Fund and Honda.” The result: “This investment increases Cruise’s post-money valuation to $19.0 billion, inclusive of SoftBank Vision Fund’s previously announced investment commitment. In the last year, Cruise has secured capital commitments totaling $7.25 billion.”

From what I’ve gathered, Cruise’s autonomous driving architecture is much more similar to Waymo’s than Tesla’s. We’ve never done a deep dive on Cruise versus Tesla Autopilot/Full Self Driving, but we have published these comparisons of Tesla’s system with Waymo’s:

Tesla Autopilot Hits 1 Billion Miles! & Why Tesla Autopilot Is The Top Approach To Autonomy
Deep Dive Into Tesla’s Autopilot & Self-Driving Architecture vs Lidar-Based Systems

Aside from those, the following may bring some useful light to the overall story:

Tesla vs. Self-Driving Competition — New MIT Video
Elon Musk Calls Lidar “A Fool’s Errand” … & Other Autonomous Driving Experts Starting To Agree
Tesla Autopilot Miles Soaring
Tesla Autonomy Day: What We Learned
Tesla Autonomy Day Video & Dozens Of Quotes

See more in our Tesla Autonomy Day archives.

Is Cruise worth $19 billion? Well, I certainly couldn’t tell you. Should it be worth $19 billion when Wall Street hardly values Tesla’s autonomous driving leadership? Well, that seems crazy to me, but such is the market today.

About the Author

Zachary Shahan Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

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Toyota and Subaru Agree to Jointly DevelopBEV-dedicated Platform and BEV SUV

June 6, 2019

Toyota and Subaru Agree to Jointly Develop
BEV-dedicated Platform and BEV SUV

Toyota Motor Corporation
Subaru Corporation

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Bringing together their cultivated technologies, the two companies will jointly develop a BEV-dedicated platform (for midsize and large passenger vehicles).

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The two companies will apply Subaru’s all-wheel-drive technologies and Toyota’s vehicle electrification technologies.

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Based on the to-be-developed BEV-dedicated platform, the two companies will jointly develop a C-segment-class SUV for sale under each company’s own brand.

Tokyo, Japan, June 6, 2019— Toyota Motor Corporation (Toyota) and Subaru Corporation (Subaru) disclosed today that they have agreed to jointly develop a platform dedicated to battery electric vehicles (BEVs) for midsize and large passenger vehicles and to jointly develop a C-segment-class BEV SUV model for sale under each company’s own brand. By combining their respective strengths, such as the all-wheel-drive technologies that Subaru has cultivated over many years and the vehicle electrification technologies that Toyota is employing to bring together other companies that share its aspirations, the two companies intend to take up the challenge of creating attractive products with appeal that only BEVs can offer.

Ever since concluding an agreement on business collaboration in 2005, Toyota and Subaru have been deepening their cooperation in various fields, including development, production, and sales. Examples include efforts that led to the start of sales of the jointly developed rear-wheel-drive Toyota 86 and Subaru BRZ in 2012 and the start of sales of Subaru’s Crosstrek Hybrid original plug-in hybrid electric vehicle (HEV) in the United States, to which was applied knowledge related to Toyota’s HEV technologies.

The automotive industry is in the midst of a once-in-a-century period of profound transformation. Starting with responses to the new CASE domains of car connectivity, autonomous or assisted driving, new mobility or car-sharing, and electrified powertrains and components, both Subaru and Toyota are required to conduct technological development with a sense of speed across a broader-than-ever spectrum of initiatives. Building on their collaborative ties thus far deepened, the agreement announced today represents a new area of collaboration that especially focuses on the urgent need to respond to CASE’s “E” domain, or electrified powertrains and components.

In addressing vehicle electrification, due to significant variation in the energy situations of each country or region and in government policies, as well as due to resulting differences in environmental regulations, in the stages of infrastructure preparation, and in market needs for electrified vehicles, efficient and speedy development of appropriate products is a must. Furthermore, the commercialization of BEVs requires the use of large-capacity batteries, and, along with the popularization of BEVs, demands of a new dimension will be placed on battery supply. In addition, stemming from differences in how cars will be used due to maximum cruising ranges and the state of infrastructure construction, sales methods with a new approach will also be needed. These and other issues present a growing number of challenges related to costs, supply, and ways of selling.

To respond with a sense of speed to the diversifying needs of these markets and to multiple challenges, both Subaru and Toyota believe that it is necessary to pursue a business model that goes beyond convention, crossing over industrial boundaries together with various types of other entities that share their aspirations. As a first step in this direction, while accelerating productization by bringing together technologies that represent each company’s strengths and cooperating where possible, the two companies will jointly develop a BEV-dedicated platform. The platform will be developed in a way that will make it broadly applicable to multiple vehicle types, including C-segment-class and D-segment-class sedans and SUVs, as well as to efficient development of derivative vehicle models.

Note from Subaru:
Following this agreement with Toyota, Subaru will now shift its existing BEV development resources to this new joint project.
Within this new framework, Subaru will continue its efforts to create an attractive BEV SUV for our customers, while improving efficiencies in terms of engineering, development, purchasing, and other areas through the new joint project.

Image: A BEV-dedicated platform Toyota and Subaru will jointly develop

[PDF/221 KB]

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