Big bucks are being thrown at the dream of cars that can drive themselves; Chevrolet is cashing in on the craze with Chevy Cruise Automation.
Investing in a Hassle-Off Driving Experience
The dream of self-driving cars and trucks has floated in the minds of drivers for generations. While supercomputer cars like the The Hoff’s old friend KITT from “Knight Rider” are still mostly fiction, almost every major name in the automotive industry is spending substantial resources on giving drivers the chance to ride like David Hasselhoff.
For General Motors and Chevy, the race for driverless tech is proving to be quite profitable. According to a CNBC report, a recent round of investment funding has raised $1.15 billion in additional funding for their self-driving car division, dubbed Cruise Automation. This latest billion adds to the already colossal coffers backing the research, with the unit now valued at a whopping $19 billion. The last year alone has brought in a stunning $7.25 billion in additional resources for the project.
Big players are making big moves and spending big bucks to push Cruise to the front of the pack. Investors such as GM itself as well as T. Rowe Price Associates, Honda and SoftBank took part in this latest fundraising phase. Honda and SoftBank had already invested heavily in the project, making $2.25 billion and $2.75 billion investments last year, respectively.
Without even releasing a product yet, the Cruise division has become a massive portion of GM’s market value, with over a third of GM’s $54 billion valuation being tied up in the research and development in the company’s autonomous future. As CarBuzz notes, taxi-by-phone car company Lyft’s entire company is valued at $2 billion less than this project alone.
All that backing appears to be working, according to Dan Ammann, former GM president and now CEO of the Cruise division. “Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation. Having deep resources to draw on as we pursue our mission is a critical competitive advantage.”
Picking a Winner in the Robot-Horse Race
The backers throwing incredible sums of money at autonomous driving projects are doing so with good reason: the company that releases a fully-functional, computer-driven consumer vehicle first could take over the automotive industry.
Financial analysts believe the technology has the ability to push the founding company’s valuation into the stratosphere, rivaling tech giants such as Google, who is funding competing driverless projects such as Waymo. Uber has also been pouring billions into their own research, hoping to capitalize by removing the middleman, drivers, from their financial equation.
Cruising to the Finish Line
Cruise Automation has had a promising start. Founded in 2013, the company was bought out by General Motors in 2016 and became their new autonomy research arm. The division’s California testing grounds host a fleet of autonomous Chevy Bolts, with planned commercial use projects coming by the end of the year. Seattle will see a satellite development facility opening by that time, with 200 to-be-hired engineers working to improve the technology’s capabilities.
Money isn’t the only reason GM is chasing the driverless dream. The Cruise team believes that self-driving electric cars could bring a host of benefits to society alongside the pocketbooks of investors.
With millions of collisions worldwide every year resulting in hundreds of thousands of deaths, the promise of accident-free AI driving means save countless lives in the years to come.
Replacing millions of gas-guzzling traditional cars with self-driving variants equipped with electric engines would be a major boon to efforts to reduce pollution generated on the world’s busy roads.
One of the biggest issues facing the development of autonomous car technology is how all the competing AIs would communicate. Unless standardization was implemented across the industry, the dreams of a driverless future could be shattered by the resulting chaos. Tackling this issue is one area Cruise appears perfectly situated to pull ahead of the competition.
General Motors and Cruise Automation’s solution is to focus on fleet-based design and implementation, rather than the idea of replacing our current cars one by one. With swarms of self-driving Chevy Bolts taking over the roads and driving together, communication and safety could be greatly improved beyond the capabilities of numerous competing AIs attempting to stay organized.
The Cruise project is built upon the belief that GM’s century-plus history of automotive development, massive manufacturing capacity and state-of-the-art research divisions give the company a leg up in designing and producing these promised intelligent swarms. Clearly, financial backers have bought on to GM’s promise of being best positioned to build the first scalable fleet of autonomous vehicles. With any luck, we’ll all soon be behind what used to be the wheel in self-driving Bolts, and the project’s investors will be a whole lot richer.
While we don’t sell driverless cars quite yet, be sure to check out our inventory of Chevy cars, trucks and SUVs today!