GM’s spinoff of Cruise drew a US$2.25-billion investment from SoftBank Group, boosting GM’s share price that day by 13%. SoftBank’s 19.6% stake valued Cruise at US$11.5 billion. GM paid an estimated US$1 billion in 2016 to acquire the San Francisco-based self-driving startup.
“Ford has seemingly taken a step out of GM’s playbook to try to unlock value” from its self-driving business, said RBC Capital Markets analyst Joseph Spak.
In afternoon trade, Ford shares were up 0.9% to US$10.56.
Despite the current flurry of development activity globally by dozens of established and startup companies, Ford senior management believes that market for self-driving vehicles eventually will consolidate around three or four major players, “and they want to be in the mix,” according to a source familiar with Ford’s thinking.
Ford has had previous discussions with potential investors, the source said, but the nature and depth of those discussions are unclear.
A Ford spokesperson declined to confirm whether the automaker has had discussions with SoftBank regarding a potential investment in Ford’s self-driving operations.
On Tuesday, Ford said it would invest US$4 billion through 2023 in its newly formed Ford Autonomous Vehicles LLC, including the US$1 billion it previously had earmarked for Argo AI, the Pittsburgh-based self-driving startup that Ford acquired in 2017.
The new unit, to be headed by Vice President Sherif Marakby and based at Ford’s new Corktown campus in Detroit, will house self-driving vehicle research, engineering and systems integration, as well as business strategy and development for the automaker’s future self-driving vehicle fleet.
Ford said it hoped to accelerate business opportunities with the creation of the new unit, which it said is “structured to take on third-party investment.”
GM Cruise and Alphabet Inc’s Waymo are often described as leading the pack of technology and auto companies competing to create self-driving cars and integrate them into ride services fleets.
Alphabet plans to launch a self-driving ride service later this year, while GM Cruise has targeted the introduction of a similar service in 2019. Ford has said it expects to put self-driving vehicles into commercial service by 2021.