Since the turn of the century, interest in autonomous cars has skyrocketed. Several car manufacturers have invested heavily in self-driving car programs, including Google with its Waymo model. However, none is more invested or more poised than General Motors Autonomous Vehicles to make a huge impact in this market. With analysts suggesting the self-driving car market may be worth $30 billion, General Motors seems to know what it’s doing. Moreover, others are taking notice of the company’s future potential when it comes to this market segment.
General Motors Commitment to Autonomous Cars
When it comes to the self-driving car, General Motors isn’t new to the game. In 2016, General Motors purchased Cruise Automation, a San Francisco-based tech company, invested in designing navigational systems for autonomous cars. The company has continued to pump half a million dollars into its Cruise division with favorable results.
Currently, General Motors’ Cruise division has two sections. One involves the Cruise self-driving car while the other is its lidar section called Strobe, Inc. Lidar is the primary sensing and navigational component of autonomous cars typically seen on the car’s roof.
General Motors recently reported that the company plans to mass-produce its Cruise model in 2019, which is earlier than predicted. It plans to use its Chevy Bolt EV as the base model for their self-driving car line. These autonomous cars have been involved in testing for some time now. In addition to California, Arizona, and Michigan, General Motors plans to test-drive its self-driving car in New York soon. The price of its autonomous cars is between $70,000 and $100,000. Experts expect this price to drop.
Softbank Vision Fund – General Motors’ New Partner
General Motors’ prediction for the launch of its autonomous cars in 2019 just gained a little more clout. Softbank Vision Fund decided to invest $2.25 billion in GM’s Cruise Automation.
In return, the Tokyo-based technology investment firm gains a 19.6 percent equity stake in the self-driving car division. Other benefits also include a directorship position on Cruise’s board and future revenue opportunities from robo-taxi services and rider data. General Motors receives $900 million now and another $1.35 billion upon the commercial release of the self-driving car.
Softbank isn’t new to the self-driving car industry either. The investment firm has also invested in Uber Inc. as well as Nvidia Corporation, a manufacturer of sensor chips as well as Nauto, Inc that Bold Business featured in a recent article. Softbank’s motivation for pursuing General Motors is two-fold, however. First, General Motors has the ability to ramp up manufacturing of autonomous cars quickly. Secondly, the integration between the company’s Detroit operations and its Cruise division in San Francisco is attractive. The immediate returns on General Motors’ self-driving car have the potential for SoftBank if released in 2019. At the same time, the long-term potential related to user data may be even greater.
Why General Motors See Autonomous Cars as the Future
While technology has catapulted interest in autonomous cars, numerous advantages to a self-driving car have similarly contributed. General Motors recognized these benefits and plans to leverage autonomous cars to gain a competitive edge. The following highlights several of the potential benefits autonomous cars can provide.
- Enhanced Safety – Statistics show that human error cause 94 percent of all motor vehicle accidents. Over 35,000 people die each year in the U.S. from car crashes. Autonomous cars eliminate this factor as well as social problems like driving under the influence.
- Economic Advantages – Car crashes also impact the economy. Overall, motor vehicle accidents cause $242 billion in direct and indirect costs each year in the U.S. alone. In addition to markedly reducing these costs, autonomous cars also reduce human resource costs in the transportation sector.
- Better Transportation Efficiency – Americans spend nearly 7 billion hours in traffic each year due to congestion and various delays. Self-driving car systems can reduce this substantially through automation and artificial intelligence. Estimates suggest Americans could save 50 minutes a day in commute times on average.
- Better Mobility – Massive segments of the population currently have limited mobility options. The elderly and the disabled who cannot drive a total over 100 million individuals. This likewise does not include youth under 16 years of age. Autonomous cars could greatly expand mobility options for millions.
Where General Motors’ Self-Driving Car Will Likely Be
While General Motors predicts a self-driving car release in 2019, the introduction of autonomous cars will likely be gradual. Robo-taxis, shuttle systems, and AV pod transports are expected to be the first uses of autonomous cars. This means its Cruise self-driving car will likely be seen first as a robo-taxi. However, the production of these autonomous cars and their use could advance quickly. While several obstacles must be considered, the self-driving car will soon be here. Moreover, it appears General Motors is in a great position for the change.
John R. Miles
EVP & Associate Publisher
John R. Miles is Executive Vice President of Business Development and Associate Publisher of Bold Business. He is a sought-after motivational speaker and writer. He brings visionary leadership style and talent as a Navy Veteran and an internationally experienced CEO, COO, and Fortune 50 CIO across a multitude of industries. Miles is also an operating partner at the Virgo Investment Group where he is responsible for identifying and pursuing new investments while supporting existing portfolio companies with operational expertise. He is active on Linkedin and Twitter and published in a variety of media. Miles graduated with honors from the U.S. Naval Academy where he was a varsity athlete.