Cruise Automation, the self-driving arm of GM (GM), is growing rapidly adding a lot of value to the Detroit automaker. The latest reports suggest that the company is preparing for a future driven by autonomous vehicles. GM is currently evaluating public offering for Cruise.
In 2016, GM had spent more than $1 billion to acquire the self-driving startup Cruise Automation. GM admires the pace at which the San-Francisco based startup works. Hence, even after spending billions, the giant automaker kept a distance from the unit and let it stay autonomous, in order to preserve the fast-moving startup culture of Cruise. Both the companies became a dominant force in autonomous cars – after Cruise acquired startup Strobe on its own. This deal highlights the freedom Cruise is given to operate on its own despite being acquired by GM.
GM is currently evaluating public offering for Cruise.
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Latest reports from Bloomberg suggest that the automaker has initiated talks with banks as it evaluates plans to publicly list the shares of the San-Francisco startup, or a spin-off, or separate listing of the unit. The decision will be implemented only after a couple of years. This news sent the shares of the Detroit automaker slightly high on Friday. As of today, the company shares are up 0.73% to $43.91.
Just last month, GM’s self-driving program received a major push after Japan’s SoftBank Vision Fund offered a whopping $2.25 billion in GM Cruise Holdings. By the end of this month, even GM is expected to invest $1.1 billion in the acquired startup.
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GM has great plans with self-driving cars. The company plans to launch the car, dubbed The Cruise AV, in US cities by 2019. If it succeeds in meeting this production target, it would be a tough competitor for Google’s Waymo, who is currently leading the self-driving race. Apart from this, GM plans to launch 20 new models of EV by 2023.