GM-backed Cruise secures a $ 5 billion mortgage for self-propelled robotic axes
Cruise, a majority-owned subsidiary of General Motors, has signed a new line of credit for $ 5 billion.
The new loan, announced Tuesday, will be provided by GM’s automotive finance division to purchase Cruise’s Origin self-driving shuttles, which GM is expected to produce at a Detroit factory in early 2023, according to Cruise CEO Dan Ammann.
“$ 10 billion. That’s a huge number. But when you think about what we’re building – safer, cleaner and more accessible modes of transport for the world – you quickly realize that it’s a necessary number too, ”Ammann said in a blog post. “This is an incredibly exciting time for Cruise.”
Ultimately, instead of trying to borrow money, as it has in the past, GM Finance is providing Cruise to Cruise. GM acquired Cruise in 2016. Since then, it has attracted investors such as Honda Motor, SoftBank Vision Fund and, more recently, Walmart and Microsoft.
Last month, Cruise said GM began assembling 100 pre-production Cruise Origin vehicles that will be built for validation testing this summer.
Launched in January 2020, Origin is the company’s first vehicle specifically designed to operate without a driver on board. It has no manual controls like pedals or a steering wheel.
The new line of credit and pre-production model announcements follow after Cruise became the first autonomous vehicle developer to receive approval from the California Public Utilities Commission earlier this month to allow passengers to ride prototype robotic taxis.
The commercialization of autonomous vehicles was far more difficult than many predicted a few years ago. The challenges have led to a consolidation in the autonomous vehicle sector after years of enthusiastically touting the technology as the next multi-trillion dollar market for transportation companies.
Cruise was scheduled to launch a public transportation service in San Francisco in 2019. The company delayed those plans this year to conduct further testing. It has operated an employee ride hailing service with a current fleet of autonomous vehicles in San Francisco for several years.