The SoftBank Vision Fund could have set up a partnership to advance autonomous driving vehicles with any major car manufacturer in the world. The $100 billion fund picked a U.S. car company for its primary project in the sector. General Motors Co. (NYSE: GM) will get $2.25 billion invested into GM Cruise. Ford Motor Co.’s (NYSE: F) plans to have a large fleet of self-driving cars by 2021 got no backing.
GM also will invest $1.1 billion into the Cruise initiative. SoftBank eventually will own 19.6% of the operation.
Ford CEO James Hackett has trumpeted his company’s plans in the self-driving segment. However, Ford is not considered a leader, even though Hackett was part of Ford’s next-generation car project, which is ironic. Hackett’s plans to cut costs and eliminate a number of cars it sells in the United States sits center stage in any discussion of his tenure.
Among the things that large car companies need to compete in the self-driving car business are their own capital and product development, some amount of technology that comes from outside their operations, and endorsements from capital that is on the cutting edge of investing in the sector. GM’s board chair and chief executive, Mary Barra, has been able to harness all three. GM will launch self-driving cars without a steering wheel or pedals. They are slated for mass production next year. Several other companies, led by Waymo, have similar schedules.
Ford’s self-driving car is supposed to launch in 2021, part of the Smart Mobility initiative. It recently invested $1 billion into an artificial intelligence company called Argo. It was not clear why Ford made the investment. It may be part of a suite of plans Ford has to advance its self-driving initiatives. Ford has been unable to get a major outside endorsement of its self-driving cars, either through a major partnership with a tech company in the sector or a large investment from a tech fund.
SoftBank could have picked Ford as its American partner. It will never be clear to the public why this was not the case. What is clear is that GM won something Ford would dearly like to have had.