GM Buying SoftBank’s Cruise Stake, Pouring Additional $1.35 Billion Into Robocar Company

General Motors is tightening its control over autonomous vehicle unit Cruise with a plan to buy SoftBank Vision fund’s stake in the San Francisco-based tech company and pour in an additional $1.35 billion as it edges closer to launching a self-driving ride service.

The Detroit-based automaker said on Friday afternoon that it intends to pay SoftBank $2.1 billion for its stake in Cruise, announcing the plan after the close of regular trading. Honda Motor Co. is also a Cruise investor and is helping GM develop the electric Origin van that will serve as the core model for its autonomous ride and delivery service.

“GM is leveraging the strength of its balance sheet to capitalize on the opportunity to increase its equity investment in Cruise and advance our integrated autonomous vehicle strategy,” Mary Barra, the carmaker’s CEO and chair, said in a statement. “Our increased investment position not only simplifies Cruise’s shareholder structure, but also provides GM and Cruise maximum flexibility to pursue the most value-accretive path to commercializing and unlocking the full potential of AV technology.”

GM’s plans for Cruise have been evolving in recent months, with the dismissal of former CEO Dan Ammann in December 2021, and the elevation of Cruise cofounder Kyle Vogt, its CTO, to the top job last month. The company is poised to start offering revenue-generating rides to the public, announcing in February that a limited number of riders initially would have access to the service for free. The company’s goal of removing steering wheels, pedals and other conventional controls from electric vehicles in its fleet also moved forward this month after the U.S. Transportation Department updated safety standards for automated vehicles.

With the additional GM investment, Cruise has raised more than $10 billion since its founding in 2013. GM and its partners in the company are making a big bet on its future potential. For now, it’s something of a financial drag on the automaker. Cruise’s operating loss was $1.2 billion last year, up from an $887 million operating loss in 2020.

“We continue to believe our investment represents an extraordinary opportunity for creating long-term shareholder value,” Barra said.

Cruise will start adding Origins to its fleet next year and thinks having them do double-duty throughout the day, acting as robotaxis during rush hour peaks and shifting to grocery and food deliveries when ride demand drops, can maximize revenue, Vogt told Forbes in January.

“Cruise will continue to operate as it does today – an independent company working alongside GM in a flexible, collaborative partnership,” he said in a statement on Friday.

GM shares rose 2.7% to $44.82 on Friday.