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Honda will use GM’s self-driving technology, invests in Cruise

351 points by BooneJS 8y ago

syntaxing 8y ago
What does these kind of investment mean for a company like Cruise? Does it provide them with more financial liquidity or does this only fatten up GM's numbers since Cruise was an investment after all? I've been stalking their NYC career opportunities but nothing yet even after the Softbank investment :/
- fma 8y ago
  I saw an interview with the GM president Dan Annman (sp?). $750mill in cash... Who doesn't like cash? $2 billion in other resources. Honda has a good European and Japanese market to sell cars. He said timetable for initial launch is same... 2019, all depends on safety. But the investment is more for after that.
madengr 8y ago
2030 for full autonomous driving? That is much later than all the hype. So is Honda being pragmatic, and most everyone else is blowing smoke? Or has self driving had a big setback in the last year?
- zjaffee 8y ago
  Waymo is about 5 years ahead of everyone else, so I think it's likely a combination of the two.
- zhobbs 8y ago
  In my experience, American companies tend to be overly optimistic, and Japanese companies tend to be overly cautious about timelines. See uncertainty avoidance and long-term orientation: https://www.hofstede-insights.com/country-comparison/japan,the-usa/ https://www.hofstede-insights.com/country-comparison/japan,t...
MBCook 8y ago
Sounds good to me. I’ve heard VERY good things about Cruise. And I like their approach much better than Tesla’s.
- viraj_shah 8y ago
  How is their approach different from Tesla's?
  - CardenB 8y ago
    They use 3D sensors (lidar) and dense, 3D maps and scans of the operational area. Also they plan to own the vehicles and operate in a designated service area rather than sell a vehicle that works everywhere.
  - avcdsuia 8y ago
    https://www.youtube.com/watch?v=s-8cYj_eh8E https://www.youtube.com/watch?v=s-8cYj_eh8E
haaen 8y ago
With a post money valuation of 14.6 billion dollar, Cruise surpasses Dropbox as the third most valuable company that YC has invested in. The valuation of Airbnb is 31 billion, Stripe 20 billion, Cruise 14.6 billion, Dropbox 11 billion. YC doesn't hold shares in Cruise anymore, since the company as a whole was sold to GM for 1 billion in 2016. After the acquisition, GM invested another 1.1 billion, Softbank Vision Fund invested 2.25 billion and now Honda invests 2.75 billion. So more than 7.1 billion dollar has been invested into Cruise. It's the best capitalised YC company. Airbnb has raised 4.4 billion, debt financing included.
- mcintyre1994 8y ago
  That's a pretty insane multiple on the acquisition price in 2 years, is there anything you can read into that or is it pretty meaningless because of all the post-acquisition investment money being pumped in?
  - azernik 8y ago
    Almost exactly half of its value is represented by the money that's been pumped in (7.1B was the sum GP arrived at). The rest...
- qubax 8y ago
  > It's the best capitalised YC company. "YC doesn't hold shares in Cruise anymore, since the company as a whole was sold to GM for 1 billion in 2016.". It's no longer a YC company.
  - andruc 8y ago
    Contextually, it's pretty clear that they're defining "YC company" as "a company that YC invested in".
- necubi 8y ago
  The cruise valuation is pretty suspect, as reported by The Information [0]. > When SoftBank agreed to invest $2.2 billion in Cruise, the self-driving unit of General Motors, most of the attention was on the valuation of $11.5 billion. But a closer look shows that could be inflated by terms. SoftBank’s initial $900 million investment in the firm is at a lower valuation of $8.3 billion; it is only if products are ready to be commercially deployed that it has agreed to invest more money at a higher valuation. With unicorn-scale deals, the topline number is sometimes not reliable, as it may come with high liquidation multipliers or other restrictive agreements. [0] https://www.theinformation.com/articles/softbank-asserts-more-control-over-startups https://www.theinformation.com/articles/softbank-asserts-mor...
tedsanders 8y ago
Interesting. If GM were super optimistic about Cruise's technology based on internal metrics, you'd think they'd invest their own money, or at least take on debt financing at GM's cost of capital. That they are taking outside investment from Softbank and now Honda suggests there is enough uncertainty that they want to limit their downside. A quick search suggests that GM is mostly debt financed, with a weighted average cost of capital of only 5%.[1] [1] https://www.gurufocus.com/term/wacc/GM/WACC-/General-Motors-Co https://www.gurufocus.com/term/wacc/GM/WACC-/General-Motors-...
- romed 8y ago
  Why does GM need to put up their own money when Japan is falling over over itself to fund their R&D program?
  - mikeyouse 8y ago
    Right? Letting your customer fund your R&D in order to better engineer the product that you and them will both use seems like a complete no-brainer.
- Fricken 8y ago
  Bringing Robotaxis to market is very capital intensive. I don't know how much money GM has to throw around, but I'm pretty sure it's a lot less than their nearest competitor, Alphabet. Waymo announced purchasing orders for 60,000 FCA Pacificas and 20,000 Jaguar IPaces to be converted into robotaxis. If we're to assume a crude ballpark estimate of $150K apiece for those vehicles, then we're talking a $12 billion just for that. GM can't go up against those kinds of capital investments without help. Argo.ai, Ford's answer to GM Cruise, is also seeking partners/funding from outside Ford. Wish them luck.
  - mikeyouse 8y ago
    > Waymo announced purchasing orders for 60,000 FCA Pacificas and 20,000 Jaguar IPaces to be converted into robotaxis. If we're to assume a crude ballpark estimate of $150K apiece for those vehicles, then we're talking a $12 billion just for that. You do know that GM makes automobiles right? If GM wants 60,000 Chevy Cruises to use for robotaxis, they can just keep their lines running for a few extra shifts. Their cost for the same vehicles is COGS, which is something like half the MSRP of an automobile. Doing so would actual increase the profit margin on their products that are sold to outside customers. GM also has ~40% more revenue than Alphabet and could easily borrow $12 billion if it were strategically important. Man people really don't understand the weight of traditional autos.
dayaz36 8y ago
Tesla has the most advanced self-driving tech on the market right now. Other car manufacturers need to follow their lead and bring their tech in house.This is too important to be dependent on third parties
- kalleboo 8y ago
  You could do both. Which is what Tesla did. They licensed MobilEye for AP1 while developing their own AP2 which was only deployed once they had a falling out with MobilEye (and IIRC the initial rollout of AP2 was a bit rocky, at the time MobilEye tech was still superior)
- RcouF1uZ4gsC 8y ago
  From what I have seen it seems like Waymo is first followed by Cruise. Tesla has had some pretty spectacular failures resulting in the deaths of 2 drivers. https://www.google.com/amp/s/www.theverge.com/platform/amp/2018/1/31/16956902/california-dmv-self-driving-car-disengagement-2017 https://www.google.com/amp/s/www.theverge.com/platform/amp/2...
  - cam3ham 8y ago
    lol
  - dayaz36 8y ago
    Humans have had some pretty spectacular failures resulting in 1.3 million deaths in 2017 alone.
- bryanlarsen 8y ago
  According to Navigant, Tesla is in last place. https://www.theverge.com/2018/1/16/16893452/detroit-auto-show-2018-google-gm-waymo-ford-tesla https://www.theverge.com/2018/1/16/16893452/detroit-auto-sho...
  - toomuchtodo 8y ago
    But selling 80k vehicles a month with autopilot hardware onboard. Who will reach the finish line first? That's the question.
lukejduncan 8y ago
I've noticed in SF at least Cruise seems to have removed branding from their cars (or I believe they are their cars). I'm curious what that implies -- either about the sentiment of self driving cars or future branding partnerships.
- notatoad 8y ago
  perhaps it's just about collecting more accurate test data - if self driving cars are obviously marked as such, the behaviour of other drivers around them may change.
  - ghostwreck 8y ago
    The turret of sensors mounted on top still might be a bit of a giveaway.
    - dotBen 8y ago
      Well there's many companies doing AV testing with sensors on their marked + unmarked cars. Not just Cruise.
- CardenB 8y ago
  I have not seen this at all.
shadowtree 8y ago
I hope they roll out augmented driving. I don't need full autonomy everywhere, but there are a few things that definitely could be rolled out now. Give me a virtual bumper. Never let me get closer than a meter to the car in front of me. If it stops, stop my car too. Get moving again? Go. Stay in the lane at low speeds. Combine with above, get a far more relaxed experience in stop and go rush hour traffic. Extend the virtual bumper to parking. Rather than video and beeping or full autonomy, just stop the car from hitting anything, 5cm distance control. Or does this exist? Haven't seen it in my Tesla test drive.
- magnetic 8y ago
  That's rather surprising because pretty much everything you are asking for is already available in Tesla cars (it has been in mine for quite a while).
  - RandallBrown 8y ago
    Will a Tesla (or any car) really prevent you from running your car into something if you try to? I think what the comment was about would be trying to park your car and as soon as your bumper is 6 inches from theres, stopping you completely. If you push down on the accelerator, nothing would happen. Inertia aside, it would be impossible to hit another car.
    - compcoffee 8y ago
      >Will a Tesla (or any car) really prevent you from running your car into something if you try to? I guess it depends on what you mean by "try to". I drive a VW; if I'm inching out of a parking spot, it will automatically stop the car if it detects traffic. I suppose I could tromp on the gas at that moment and blast out into oncoming cars, but I'm not sure why I'd want to... Same with catching up with slow moving traffic at highway speeds. It will detect the vehicle (or object) in front and apply the necessary braking pressure. The slower the object in front is moving, the faster it will apply harder pressure (and flash a warning to apply the brakes manually). Essentially, if you don't react, the car will. You can then override it.
Fricken 8y ago
Honda and Waymo have been 'in talks' for years, with the first formal announcement of a vaguely defined partnership arriving in April earlier this year. Supposedly they were going to build a purpose built delivery vehicle together. The odds that that deal has gone up in smoke I'm guessing are high. https://www.bloomberg.com/news/features/2018-04-02/waymo-isn-t-slowing-down-pact-with-honda-could-include-delivery https://www.bloomberg.com/news/features/2018-04-02/waymo-isn...
yalogin 8y ago
I thought GM bought Cruise. Is that not the case?
- tedsanders 8y ago
  GM did buy Cruise. Then GM sold stakes to SoftBank and now Honda. Cruise is structured as an independent entity with, as of now, three owners. GM remains the majority owner.
  - devy 8y ago
    IMMO, this is a good strategy from GM. The more big autos to adopt / invest in Cruise, the better.
    - threeseed 8y ago
      Especially since it’s on track to being a commodity technology.
twblalock 8y ago
It's interesting that American automakers are ahead of the Japanese automakers in the areas of self-driving and electric cars. Not really what I would have expected if you had asked me 10 years ago.
- jbigelow76 8y ago
  If it weren't for the threat of Google and Uber American car makers would still probably be uh... asleep at the wheel :)
- Dumblydorr 8y ago
  Was it not the DARPA challenge in the USA that honed the skills of urmson, CMU, Stanford, and other engineers? What role did Japan have to play in FSD vehicles?
- qubax 8y ago
  Why? We lead the world in software by a long margin. It's one of the reasons english is the lingua franca of software development. As for electric cars, it's only the US and the chinese who are heavily invested in it. The japanese have a presence in EVs but they are more heavily invested in hydrogen cars.
  - distances 8y ago
    European manufacturers are heavily investing in electric cars. You're perhaps blinded by local news -- then again I'm surely too, as I don't know of US companies other than Tesla that are doing something with electric.
    - ghaff 8y ago
      GM has been shipping the Chevy Bolt for a while though sales are down. Of course there are lots of hybrids.
    - twblalock 8y ago
      GM has the Bolt and Volt, and a Cadillac hybrid. Ford has the C-Max plug-in and a few other hybrids, and is going to build a hybrid F-150 and Mustang in the next few years. And for some reason Chrysler managed to beat Toyota and Honda to market with the first hybrid minivan. Given that the F-150 is the bestselling vehicle in the United States, Ford might become one of the world's top sellers of hybrid cars when they release it. And the hybrid Mustang is supposed to be one of the fastest Mustang models.
MH15 8y ago
This is interesting... GM bought Cruise for what, $2 billion? And now Honda buys a minuscule stake in Cruise company for the same price GM bought the whole thing for.
- bluGill 8y ago
  That is normal. A small amount of money buys a large stake in the early days. As the technology gets closer and closer to reality the amount it costs to buy goes up. However don't read the above as invest in the early days - there are a lot of seemingly great ideas that will turn out to fail for some reason. Honda's bet is much less risky because it seems much more likely that cruise will have something to sell in the future. GM's bet was more risky, and [I forget who they bought cruise from] made an even more risky bet. This time it looks like it will pay off, but not all do.
- devy 8y ago
  > And now Honda buys a minuscule stake in Cruise company for the same price GM bought the whole thing for. No. The Honda investment is $750M. The rest of $2B commitment are for Honda to implement/integrate with Cruise's hardware/software technologies - not really payments to Cruise.
- fma 8y ago
  $500 million cash and another $500 mill in performance bonus, contract buyouts etc.
samfisher83 8y ago
Why doesn't anyone do a deal with comma.ai? They actually have a product that kind of works with just handful of people. Edit: Why all the down votes. Go check out some of the videos. It works pretty well. Its a level 2 system so the user still needs to pay attention to the roads which is true with any lkas system out now days.
- NegativeLatency 8y ago
  Uber’s system “kinda worked” too...
- maym86 8y ago
  They have built a single, forward looking, camera system on an Android platform and are using python for the control system. No serious auto manufacturer would trust a system like that for vehicle safety. It's a less reliable version of the lane keeping systems that the automotive manufacturers already have and nothing close to the autonomous system that George Hotz was promising would be easy a few years back. I also doubt automotive manufacturers want to deal with the drama around comma.ai and its publicity given they have a reputation to maintain as serious, safety conscious, organizations.
  - samfisher83 8y ago
    For all current LKAS systems you need to pay attention to the road including the Tesla. The LKAS most manufactures use aren't that good.
    - maym86 8y ago
      Comma.ai has the same constraints. No monocular camera system works without careful user supervision. Even lidar based systems are not that reliable yet that you could trust them to the point of not paying attention.
  - leesec 8y ago
    As far as quality goes it's way more reliable. Most of the "advanced" driver assistance systems would kill you within a minute if you left the car to their control. What they have now is a Devkit that is level 2, which they are using to iterate on, gather data, gather feedback, and will ultimately ship a much more complete consumer friendly product. It's really the only option for hobbyists and enthusiasts to get self driving capabilities today without 50k+.
mrnobody_67 8y ago
How does any autonomous driving startup compete against that pile of cash?
- bluGill 8y ago
  I don't think that you can do autonomous driving without a pile of cash. The problem is too complex.
- empath75 8y ago
  You figure out something you can sell them.
- MBCook 8y ago
  It’s early days. If you have a better idea or can make your tech significantly more reliable/cheaper you could still jump out front of the pack. But it’s not going to be easy. Lots of companies are working hard so the chance of a come-from-nowhere great idea seems lower and lower. If it happens I’d assume it comes from someone with experience in the domain... i.e. an existing player with a new angle.
- leesec 8y ago
  Lol, cash does not equal innovation. Comma.ai has only raised 8~ million and already has a product you can buy today on par ( or better ) with GM's supercruise.
  - rootusrootus 8y ago
    Do you work for comma.ai? Because I can't imagine any other reason for the absurdity of your cheerleading. On par with Super Cruise? Gimme a break.
    - leesec 8y ago
      Lol no just a big fan and someone who ported one of their cars. Just most of the self driving car news lately seems scammy to me (by that I mean a lot of hype and no product), and I wish more people knew about the actual state of the industry. Have you tried both systems? SuperCruise is really good at where it's able to drive, maybe better than openpilot but not by much. Openpilot is also getting really good and can be enabled anywhere, tho most of it's usage is still on highways.
stephengillie 8y ago
Automakers use each others parts all the time. Dodge used Mitsubishi engines in the K cars and early minivans. Rolls Royce use Mercedes engines today. Nissan used Toyota's hybrid transmission in early-2010s Altimas. This is a good sign for Criuse being a competitor in the self-driving space, and a sign of self-driving market health in general. Much better than Toyota investing $500 billion in Uber for self driving.[∆] [∆]https://news.ycombinator.com/item?id=17853248 https://news.ycombinator.com/item?id=17853248
- atvatar 8y ago
  Rolls Royce is owned by BMW, they definitely don't use Mercedes engines today
  - fredoralive 8y ago
    Perhaps they are thinking of Aston Martin, who have fairly recently entered into an engine deal with Mercedes.
- bootlooped 8y ago
  The Honda Passport and Acura SLX were both built by Isuzu, which is partially owned by GM.
  - justtopost 8y ago
    Only the 1st gen of each iirc, needed for a head start in the blossoming SUV market at the time. A smart move, if a bit risky based on their relative QC at the time. And you left out the 1st gen Odyssey, also an Isuzu rebadge. You can tell them apart easy, as they are 4-door rather than sliding door models.
- ryen 8y ago
  I think you mean Toyota invested $500 million.
ProfessorLayton 8y ago
What's interesting is that Honda is a company that has always prioritized being in control of its own destiny. What made them interesting in the past is that there are many examples where they'd engineer their own solution to a problem, rather than license IP. Quote from Mr. Honda: "We [Honda] refuse to depend on anyone else. We will not copy foreign products nor pay royalties for the use of other companies’ patents. We don’t intend to get support from the government, either. I’m making it clear that we will do it our way." [1] Notable examples: - Hondamatic transmission [1]. For better or for worse, it was only until recently that Honda started using transmissions from ZF like other automakers. Arguably because automatic transmissions are on their way out, and they're focusing on other drivetrains. - Honda's hybrid drive: They developed their own two-motor system rather than license Toyota's (Rather brilliant) solution like other companies. Their first system in the Insight (gen 1) not withstanding. - VTEC It seems like there's going to be an inevitable commoditization of car manufacturers in the future. Equally interesting is GM ceding some ownership of potentially game-changing tech. [1] https://world.honda.com/history/challenge/1968hondamatic/index.html https://world.honda.com/history/challenge/1968hondamatic/ind...
- dschuler 8y ago
  What made Toyota's solution brilliant? Interesting history about Honda, thanks for sharing!
  - oppositelock 8y ago
    It's genius in it simplicity. The car doesn't actually have a transmission and uses planetary gear sets and two electric motors to fake one. The gasoline engine is used as the "baseline" power, and the motors then either take power away from it to charge the batteries, or complement it to help in acceleration, or just bypass it completely. When the car is running in pure electric mode, the gas engine is stopped, and the motors work together to spin the output shaft at the desired speed. When the car is using mixed power, the gasoline engine is working at a desired power level, one of the motor/generators is adding additional torque, and the second motor is used to make up the rotational difference between the sun and planet gears. This blending of gasoline and electric allows the wheel output speed to be independent of the gasoline engine speed. When the car is charging the battery, the gasoline engine is run harder than it needs to be to move the car, and one of the motor/generator units is fighting against it, using the excess torque to generate power. So, there is no transmission, no "shifting", the engine and mgu's are permanently connected to gears and simply spin them at the right speeds for the desired power and speed output.
protomyth 8y ago
Makes sense since Honda went in with GM on On-Star. I guess they view it as needed, but better as a partnership with a company they have dealt with before.
mmanfrin 8y ago
Honestly this makes sense, and I hope the rest of the industry follows suit. I'd rather all car companies be working towards one, strong implementation of self-driving, than for every individual company to work on their own. It would also mean liability could be diffused to the industry rather than companies.
alexnewman 8y ago
The great boondoggle continues
lawrenceyan 8y ago
Masayoshi Son strikes again.
jameslk 8y ago
So GM bought Cruise for $500MM in 2016 and Honda just invested in Cruise, valuing Cruse at $14.6B. Therefore the value of GM should be an extra $14B, and yet GM's stock has been flat since the purchase. What's going on here?
- jedberg 8y ago
  It could be that the stock market doesn't agree with that private valuation. Also, that valuation is a little odd because some of the investment doesn't kick in until they launch a product, and in the case of Honda, some of it is in machines and other non-monetary things. Or it could be that as Cruise's value goes up, GMs goes down. Look at what was Yahoo for an example -- for a while the stock was worth less than just the value of their Alibaba shares, meaning the stock market attributed a negative value to what was left of Yahoo.
  - jameslk 8y ago
    The latter seems unlikely given the stock of Ford, Toyota and other related companies have mostly followed the same peaks and troughs of GM (for quick comparison, look at GM vs CARZ etf). Unless GM has managed to bleed the exact value of Cruise over that period.
  - vonmoltke 8y ago
    > Look at what was Yahoo for an example -- for a while the stock was worth less than just the value of their Alibaba shares, meaning the stock market attributed a negative value to what was left of Yahoo. That is not what the situation meant. Yahoo was trading at less than their book value per share. The vast majority of their book value was the share of Alibaba the company owned. This asset was not generating revenue for Yahoo, nor was it a liquid investment that Yahoo could convert into cash whenever it wanted to. There may have also been other conditions on sale of the stake that meant, in at last some circumstances, the liquidation value of the stake was significantly less than the paper value on the books. Therefore, it gets discounted by the market. Since it comprised such a large portion of Yahoo's book value, the size of the discount was greater than the value of Yahoo's operations, leading to a price/book ratio less than 1. Yahoo's other operations still had positive value.
person_of_color 8y ago
Anyone know whether it's too late to join Cruise?
kristianp 8y ago
I figure that by the time this self driving tech makes it to Honda's vehicles, few people will be buying them, because Honda has failed to get on the EV bandwagon. Honda and Mazda may be victims of the surge of EVs soon to come from China, Europe and Tesla. Other Asian carmakers such as Toyota and Hyundai are doing much better getting onboard the EV/Hybrid train though.
- justtopost 8y ago
  Honda is doing fine, and was early into the hybrid market. Whatever are you on about? The only missteps was their zev hydrogen tech which doesn't make engineering sense (to me), and a black eye from bad v6 transmissions for way too long in the 90s thru 00s, and a departure from small, low-displacement, high efficiency, well handling cars with sla suspension for pigfat appliances with cheap mcstrut suspension and more wings. Lucky for them, the world is a bit pigfat and risk adverse themselves, and still buy CRVs like crazy. While the 88-01 civic, and s2000 still somehow support their reputation in enthusiast circles thanks to those now purely nostalgic qualities. But I digress. I think ICE cars will continue to serve a purpose. Mazda just announced a new rotary ICE hybrid engine design this week! If self-driving tech takes off, it will be applied just as easily to either tech. I see Honda at no major positional disadvantage here.
  - mywittyname 8y ago
    MacPherson struts are fine. Even the most ardent enthusiast has difficulty telling the difference between a MP setup and a double wishbone. BMW uses them and Porsche uses them on their GT# 911s. You'd think if there were a case to be made for the performance demerits of a MP setup, Porsche wouldn't be using them on their halo cars (or their class-winning race cars).
  - cjhanks 8y ago
    Initial cars will have a reasonably high power consumption requirement. Vehicles with adequate voltage supply will probably have an advantage compared to less sophisticated energy distribution.
  - 8y ago
cjhanks 8y ago
Can somebody explain why GM would want to provide competitive advantage to its competitor for a fixed price? Either GM has licensing fees in its future, or the project is proving to be too capital intensive. Or could there be an effort towards a consortium? Most of the major talent in the field is gainfully employed. I simply do not fully understand the objective of all of this capital raising. I look forward to better understanding the strategy in the rear view mirror.
- cmrdporcupine 8y ago
  GM has provided engines for other manufacturers for years, so is it really that different?
- sjg007 8y ago
  Honda cars and gm trucks
- wittyusername 8y ago
  I think one issue is that, like VR, one bad actor sours the consumer appetite for the entire concept. I think a safer road for GM is to become the de facto A+ supplier of tech that works well than for 2/3 of the legacy industry to have janky half-working sorta-dangerous solutions in 2025.

351 points by BooneJS 8y ago

What does these kind of investment mean for a company like Cruise? Does it provide them with more financial liquidity or does this only fatten up GM's numbers since Cruise was an investment after all? I've been stalking their NYC career opportunities but nothing yet even after the Softbank investment :/

fma 8y ago
I saw an interview with the GM president Dan Annman (sp?). $750mill in cash... Who doesn't like cash? $2 billion in other resources. Honda has a good European and Japanese market to sell cars. He said timetable for initial launch is same... 2019, all depends on safety. But the investment is more for after that.

madengr 8y ago

2030 for full autonomous driving? That is much later than all the hype. So is Honda being pragmatic, and most everyone else is blowing smoke? Or has self driving had a big setback in the last year?

zjaffee 8y ago
Waymo is about 5 years ahead of everyone else, so I think it's likely a combination of the two.
zhobbs 8y ago
In my experience, American companies tend to be overly optimistic, and Japanese companies tend to be overly cautious about timelines. See uncertainty avoidance and long-term orientation: https://www.hofstede-insights.com/country-comparison/japan,the-usa/ https://www.hofstede-insights.com/country-comparison/japan,t...

MBCook 8y ago

Sounds good to me. I’ve heard VERY good things about Cruise. And I like their approach much better than Tesla’s.

viraj_shah 8y ago
How is their approach different from Tesla's?
- CardenB 8y ago
  They use 3D sensors (lidar) and dense, 3D maps and scans of the operational area. Also they plan to own the vehicles and operate in a designated service area rather than sell a vehicle that works everywhere.
- avcdsuia 8y ago
  https://www.youtube.com/watch?v=s-8cYj_eh8E https://www.youtube.com/watch?v=s-8cYj_eh8E

haaen 8y ago

With a post money valuation of 14.6 billion dollar, Cruise surpasses Dropbox as the third most valuable company that YC has invested in. The valuation of Airbnb is 31 billion, Stripe 20 billion, Cruise 14.6 billion, Dropbox 11 billion. YC doesn't hold shares in Cruise anymore, since the company as a whole was sold to GM for 1 billion in 2016. After the acquisition, GM invested another 1.1 billion, Softbank Vision Fund invested 2.25 billion and now Honda invests 2.75 billion. So more than 7.1 billion dollar has been invested into Cruise. It's the best capitalised YC company. Airbnb has raised 4.4 billion, debt financing included.

mcintyre1994 8y ago
That's a pretty insane multiple on the acquisition price in 2 years, is there anything you can read into that or is it pretty meaningless because of all the post-acquisition investment money being pumped in?
- azernik 8y ago
  Almost exactly half of its value is represented by the money that's been pumped in (7.1B was the sum GP arrived at). The rest...
qubax 8y ago
> It's the best capitalised YC company. "YC doesn't hold shares in Cruise anymore, since the company as a whole was sold to GM for 1 billion in 2016.". It's no longer a YC company.
- andruc 8y ago
  Contextually, it's pretty clear that they're defining "YC company" as "a company that YC invested in".
necubi 8y ago
The cruise valuation is pretty suspect, as reported by The Information [0]. > When SoftBank agreed to invest $2.2 billion in Cruise, the self-driving unit of General Motors, most of the attention was on the valuation of $11.5 billion. But a closer look shows that could be inflated by terms. SoftBank’s initial $900 million investment in the firm is at a lower valuation of $8.3 billion; it is only if products are ready to be commercially deployed that it has agreed to invest more money at a higher valuation. With unicorn-scale deals, the topline number is sometimes not reliable, as it may come with high liquidation multipliers or other restrictive agreements. [0] https://www.theinformation.com/articles/softbank-asserts-more-control-over-startups https://www.theinformation.com/articles/softbank-asserts-mor...

tedsanders 8y ago

Interesting. If GM were super optimistic about Cruise's technology based on internal metrics, you'd think they'd invest their own money, or at least take on debt financing at GM's cost of capital. That they are taking outside investment from Softbank and now Honda suggests there is enough uncertainty that they want to limit their downside. A quick search suggests that GM is mostly debt financed, with a weighted average cost of capital of only 5%.[1] [1] https://www.gurufocus.com/term/wacc/GM/WACC-/General-Motors-Co https://www.gurufocus.com/term/wacc/GM/WACC-/General-Motors-...

romed 8y ago
Why does GM need to put up their own money when Japan is falling over over itself to fund their R&D program?
- mikeyouse 8y ago
  Right? Letting your customer fund your R&D in order to better engineer the product that you and them will both use seems like a complete no-brainer.
Fricken 8y ago
Bringing Robotaxis to market is very capital intensive. I don't know how much money GM has to throw around, but I'm pretty sure it's a lot less than their nearest competitor, Alphabet. Waymo announced purchasing orders for 60,000 FCA Pacificas and 20,000 Jaguar IPaces to be converted into robotaxis. If we're to assume a crude ballpark estimate of $150K apiece for those vehicles, then we're talking a $12 billion just for that. GM can't go up against those kinds of capital investments without help. Argo.ai, Ford's answer to GM Cruise, is also seeking partners/funding from outside Ford. Wish them luck.
- mikeyouse 8y ago
  > Waymo announced purchasing orders for 60,000 FCA Pacificas and 20,000 Jaguar IPaces to be converted into robotaxis. If we're to assume a crude ballpark estimate of $150K apiece for those vehicles, then we're talking a $12 billion just for that. You do know that GM makes automobiles right? If GM wants 60,000 Chevy Cruises to use for robotaxis, they can just keep their lines running for a few extra shifts. Their cost for the same vehicles is COGS, which is something like half the MSRP of an automobile. Doing so would actual increase the profit margin on their products that are sold to outside customers. GM also has ~40% more revenue than Alphabet and could easily borrow $12 billion if it were strategically important. Man people really don't understand the weight of traditional autos.

dayaz36 8y ago

Tesla has the most advanced self-driving tech on the market right now. Other car manufacturers need to follow their lead and bring their tech in house.This is too important to be dependent on third parties

kalleboo 8y ago
You could do both. Which is what Tesla did. They licensed MobilEye for AP1 while developing their own AP2 which was only deployed once they had a falling out with MobilEye (and IIRC the initial rollout of AP2 was a bit rocky, at the time MobilEye tech was still superior)
RcouF1uZ4gsC 8y ago
From what I have seen it seems like Waymo is first followed by Cruise. Tesla has had some pretty spectacular failures resulting in the deaths of 2 drivers. https://www.google.com/amp/s/www.theverge.com/platform/amp/2018/1/31/16956902/california-dmv-self-driving-car-disengagement-2017 https://www.google.com/amp/s/www.theverge.com/platform/amp/2...
- cam3ham 8y ago
  lol
- dayaz36 8y ago
  Humans have had some pretty spectacular failures resulting in 1.3 million deaths in 2017 alone.
bryanlarsen 8y ago
According to Navigant, Tesla is in last place. https://www.theverge.com/2018/1/16/16893452/detroit-auto-show-2018-google-gm-waymo-ford-tesla https://www.theverge.com/2018/1/16/16893452/detroit-auto-sho...
- toomuchtodo 8y ago
  But selling 80k vehicles a month with autopilot hardware onboard. Who will reach the finish line first? That's the question.

lukejduncan 8y ago

I've noticed in SF at least Cruise seems to have removed branding from their cars (or I believe they are their cars). I'm curious what that implies -- either about the sentiment of self driving cars or future branding partnerships.

notatoad 8y ago
perhaps it's just about collecting more accurate test data - if self driving cars are obviously marked as such, the behaviour of other drivers around them may change.
- ghostwreck 8y ago
  The turret of sensors mounted on top still might be a bit of a giveaway.
  - dotBen 8y ago
    Well there's many companies doing AV testing with sensors on their marked + unmarked cars. Not just Cruise.
CardenB 8y ago
I have not seen this at all.

shadowtree 8y ago

I hope they roll out augmented driving. I don't need full autonomy everywhere, but there are a few things that definitely could be rolled out now. Give me a virtual bumper. Never let me get closer than a meter to the car in front of me. If it stops, stop my car too. Get moving again? Go. Stay in the lane at low speeds. Combine with above, get a far more relaxed experience in stop and go rush hour traffic. Extend the virtual bumper to parking. Rather than video and beeping or full autonomy, just stop the car from hitting anything, 5cm distance control. Or does this exist? Haven't seen it in my Tesla test drive.

magnetic 8y ago
That's rather surprising because pretty much everything you are asking for is already available in Tesla cars (it has been in mine for quite a while).
- RandallBrown 8y ago
  Will a Tesla (or any car) really prevent you from running your car into something if you try to? I think what the comment was about would be trying to park your car and as soon as your bumper is 6 inches from theres, stopping you completely. If you push down on the accelerator, nothing would happen. Inertia aside, it would be impossible to hit another car.
  - compcoffee 8y ago
    >Will a Tesla (or any car) really prevent you from running your car into something if you try to? I guess it depends on what you mean by "try to". I drive a VW; if I'm inching out of a parking spot, it will automatically stop the car if it detects traffic. I suppose I could tromp on the gas at that moment and blast out into oncoming cars, but I'm not sure why I'd want to... Same with catching up with slow moving traffic at highway speeds. It will detect the vehicle (or object) in front and apply the necessary braking pressure. The slower the object in front is moving, the faster it will apply harder pressure (and flash a warning to apply the brakes manually). Essentially, if you don't react, the car will. You can then override it.

Fricken 8y ago

Honda and Waymo have been 'in talks' for years, with the first formal announcement of a vaguely defined partnership arriving in April earlier this year. Supposedly they were going to build a purpose built delivery vehicle together. The odds that that deal has gone up in smoke I'm guessing are high. https://www.bloomberg.com/news/features/2018-04-02/waymo-isn-t-slowing-down-pact-with-honda-could-include-delivery https://www.bloomberg.com/news/features/2018-04-02/waymo-isn...

yalogin 8y ago

I thought GM bought Cruise. Is that not the case?

tedsanders 8y ago
GM did buy Cruise. Then GM sold stakes to SoftBank and now Honda. Cruise is structured as an independent entity with, as of now, three owners. GM remains the majority owner.
- devy 8y ago
  IMMO, this is a good strategy from GM. The more big autos to adopt / invest in Cruise, the better.
  - threeseed 8y ago
    Especially since it’s on track to being a commodity technology.

twblalock 8y ago

It's interesting that American automakers are ahead of the Japanese automakers in the areas of self-driving and electric cars. Not really what I would have expected if you had asked me 10 years ago.

jbigelow76 8y ago
If it weren't for the threat of Google and Uber American car makers would still probably be uh... asleep at the wheel :)
Dumblydorr 8y ago
Was it not the DARPA challenge in the USA that honed the skills of urmson, CMU, Stanford, and other engineers? What role did Japan have to play in FSD vehicles?
qubax 8y ago
Why? We lead the world in software by a long margin. It's one of the reasons english is the lingua franca of software development. As for electric cars, it's only the US and the chinese who are heavily invested in it. The japanese have a presence in EVs but they are more heavily invested in hydrogen cars.
- distances 8y ago
  European manufacturers are heavily investing in electric cars. You're perhaps blinded by local news -- then again I'm surely too, as I don't know of US companies other than Tesla that are doing something with electric.
  - ghaff 8y ago
    GM has been shipping the Chevy Bolt for a while though sales are down. Of course there are lots of hybrids.
  - twblalock 8y ago
    GM has the Bolt and Volt, and a Cadillac hybrid. Ford has the C-Max plug-in and a few other hybrids, and is going to build a hybrid F-150 and Mustang in the next few years. And for some reason Chrysler managed to beat Toyota and Honda to market with the first hybrid minivan. Given that the F-150 is the bestselling vehicle in the United States, Ford might become one of the world's top sellers of hybrid cars when they release it. And the hybrid Mustang is supposed to be one of the fastest Mustang models.

MH15 8y ago

This is interesting... GM bought Cruise for what, $2 billion? And now Honda buys a minuscule stake in Cruise company for the same price GM bought the whole thing for.

bluGill 8y ago
That is normal. A small amount of money buys a large stake in the early days. As the technology gets closer and closer to reality the amount it costs to buy goes up. However don't read the above as invest in the early days - there are a lot of seemingly great ideas that will turn out to fail for some reason. Honda's bet is much less risky because it seems much more likely that cruise will have something to sell in the future. GM's bet was more risky, and [I forget who they bought cruise from] made an even more risky bet. This time it looks like it will pay off, but not all do.
devy 8y ago
> And now Honda buys a minuscule stake in Cruise company for the same price GM bought the whole thing for. No. The Honda investment is $750M. The rest of $2B commitment are for Honda to implement/integrate with Cruise's hardware/software technologies - not really payments to Cruise.
fma 8y ago
$500 million cash and another $500 mill in performance bonus, contract buyouts etc.

samfisher83 8y ago

Why doesn't anyone do a deal with comma.ai? They actually have a product that kind of works with just handful of people. Edit: Why all the down votes. Go check out some of the videos. It works pretty well. Its a level 2 system so the user still needs to pay attention to the roads which is true with any lkas system out now days.

NegativeLatency 8y ago
Uber’s system “kinda worked” too...
maym86 8y ago
They have built a single, forward looking, camera system on an Android platform and are using python for the control system. No serious auto manufacturer would trust a system like that for vehicle safety. It's a less reliable version of the lane keeping systems that the automotive manufacturers already have and nothing close to the autonomous system that George Hotz was promising would be easy a few years back. I also doubt automotive manufacturers want to deal with the drama around comma.ai and its publicity given they have a reputation to maintain as serious, safety conscious, organizations.
- samfisher83 8y ago
  For all current LKAS systems you need to pay attention to the road including the Tesla. The LKAS most manufactures use aren't that good.
  - maym86 8y ago
    Comma.ai has the same constraints. No monocular camera system works without careful user supervision. Even lidar based systems are not that reliable yet that you could trust them to the point of not paying attention.
- leesec 8y ago
  As far as quality goes it's way more reliable. Most of the "advanced" driver assistance systems would kill you within a minute if you left the car to their control. What they have now is a Devkit that is level 2, which they are using to iterate on, gather data, gather feedback, and will ultimately ship a much more complete consumer friendly product. It's really the only option for hobbyists and enthusiasts to get self driving capabilities today without 50k+.

mrnobody_67 8y ago

How does any autonomous driving startup compete against that pile of cash?

bluGill 8y ago
I don't think that you can do autonomous driving without a pile of cash. The problem is too complex.
empath75 8y ago
You figure out something you can sell them.
MBCook 8y ago
It’s early days. If you have a better idea or can make your tech significantly more reliable/cheaper you could still jump out front of the pack. But it’s not going to be easy. Lots of companies are working hard so the chance of a come-from-nowhere great idea seems lower and lower. If it happens I’d assume it comes from someone with experience in the domain... i.e. an existing player with a new angle.
leesec 8y ago
Lol, cash does not equal innovation. Comma.ai has only raised 8~ million and already has a product you can buy today on par ( or better ) with GM's supercruise.
- rootusrootus 8y ago
  Do you work for comma.ai? Because I can't imagine any other reason for the absurdity of your cheerleading. On par with Super Cruise? Gimme a break.
  - leesec 8y ago
    Lol no just a big fan and someone who ported one of their cars. Just most of the self driving car news lately seems scammy to me (by that I mean a lot of hype and no product), and I wish more people knew about the actual state of the industry. Have you tried both systems? SuperCruise is really good at where it's able to drive, maybe better than openpilot but not by much. Openpilot is also getting really good and can be enabled anywhere, tho most of it's usage is still on highways.

stephengillie 8y ago

Automakers use each others parts all the time. Dodge used Mitsubishi engines in the K cars and early minivans. Rolls Royce use Mercedes engines today. Nissan used Toyota's hybrid transmission in early-2010s Altimas. This is a good sign for Criuse being a competitor in the self-driving space, and a sign of self-driving market health in general. Much better than Toyota investing $500 billion in Uber for self driving.[∆] [∆]https://news.ycombinator.com/item?id=17853248 https://news.ycombinator.com/item?id=17853248

atvatar 8y ago
Rolls Royce is owned by BMW, they definitely don't use Mercedes engines today
- fredoralive 8y ago
  Perhaps they are thinking of Aston Martin, who have fairly recently entered into an engine deal with Mercedes.
bootlooped 8y ago
The Honda Passport and Acura SLX were both built by Isuzu, which is partially owned by GM.
- justtopost 8y ago
  Only the 1st gen of each iirc, needed for a head start in the blossoming SUV market at the time. A smart move, if a bit risky based on their relative QC at the time. And you left out the 1st gen Odyssey, also an Isuzu rebadge. You can tell them apart easy, as they are 4-door rather than sliding door models.
ryen 8y ago
I think you mean Toyota invested $500 million.

ProfessorLayton 8y ago

What's interesting is that Honda is a company that has always prioritized being in control of its own destiny. What made them interesting in the past is that there are many examples where they'd engineer their own solution to a problem, rather than license IP. Quote from Mr. Honda: "We [Honda] refuse to depend on anyone else. We will not copy foreign products nor pay royalties for the use of other companies’ patents. We don’t intend to get support from the government, either. I’m making it clear that we will do it our way." [1] Notable examples: - Hondamatic transmission [1]. For better or for worse, it was only until recently that Honda started using transmissions from ZF like other automakers. Arguably because automatic transmissions are on their way out, and they're focusing on other drivetrains. - Honda's hybrid drive: They developed their own two-motor system rather than license Toyota's (Rather brilliant) solution like other companies. Their first system in the Insight (gen 1) not withstanding. - VTEC It seems like there's going to be an inevitable commoditization of car manufacturers in the future. Equally interesting is GM ceding some ownership of potentially game-changing tech. [1] https://world.honda.com/history/challenge/1968hondamatic/index.html https://world.honda.com/history/challenge/1968hondamatic/ind...

dschuler 8y ago
What made Toyota's solution brilliant? Interesting history about Honda, thanks for sharing!
- oppositelock 8y ago
  It's genius in it simplicity. The car doesn't actually have a transmission and uses planetary gear sets and two electric motors to fake one. The gasoline engine is used as the "baseline" power, and the motors then either take power away from it to charge the batteries, or complement it to help in acceleration, or just bypass it completely. When the car is running in pure electric mode, the gas engine is stopped, and the motors work together to spin the output shaft at the desired speed. When the car is using mixed power, the gasoline engine is working at a desired power level, one of the motor/generators is adding additional torque, and the second motor is used to make up the rotational difference between the sun and planet gears. This blending of gasoline and electric allows the wheel output speed to be independent of the gasoline engine speed. When the car is charging the battery, the gasoline engine is run harder than it needs to be to move the car, and one of the motor/generator units is fighting against it, using the excess torque to generate power. So, there is no transmission, no "shifting", the engine and mgu's are permanently connected to gears and simply spin them at the right speeds for the desired power and speed output.

protomyth 8y ago

Makes sense since Honda went in with GM on On-Star. I guess they view it as needed, but better as a partnership with a company they have dealt with before.

mmanfrin 8y ago

Honestly this makes sense, and I hope the rest of the industry follows suit. I'd rather all car companies be working towards one, strong implementation of self-driving, than for every individual company to work on their own. It would also mean liability could be diffused to the industry rather than companies.

alexnewman 8y ago

The great boondoggle continues

lawrenceyan 8y ago

Masayoshi Son strikes again.

jameslk 8y ago

So GM bought Cruise for $500MM in 2016 and Honda just invested in Cruise, valuing Cruse at $14.6B. Therefore the value of GM should be an extra $14B, and yet GM's stock has been flat since the purchase. What's going on here?

jedberg 8y ago
It could be that the stock market doesn't agree with that private valuation. Also, that valuation is a little odd because some of the investment doesn't kick in until they launch a product, and in the case of Honda, some of it is in machines and other non-monetary things. Or it could be that as Cruise's value goes up, GMs goes down. Look at what was Yahoo for an example -- for a while the stock was worth less than just the value of their Alibaba shares, meaning the stock market attributed a negative value to what was left of Yahoo.
- jameslk 8y ago
  The latter seems unlikely given the stock of Ford, Toyota and other related companies have mostly followed the same peaks and troughs of GM (for quick comparison, look at GM vs CARZ etf). Unless GM has managed to bleed the exact value of Cruise over that period.
- vonmoltke 8y ago
  > Look at what was Yahoo for an example -- for a while the stock was worth less than just the value of their Alibaba shares, meaning the stock market attributed a negative value to what was left of Yahoo. That is not what the situation meant. Yahoo was trading at less than their book value per share. The vast majority of their book value was the share of Alibaba the company owned. This asset was not generating revenue for Yahoo, nor was it a liquid investment that Yahoo could convert into cash whenever it wanted to. There may have also been other conditions on sale of the stake that meant, in at last some circumstances, the liquidation value of the stake was significantly less than the paper value on the books. Therefore, it gets discounted by the market. Since it comprised such a large portion of Yahoo's book value, the size of the discount was greater than the value of Yahoo's operations, leading to a price/book ratio less than 1. Yahoo's other operations still had positive value.

person_of_color 8y ago

Anyone know whether it's too late to join Cruise?

kristianp 8y ago

I figure that by the time this self driving tech makes it to Honda's vehicles, few people will be buying them, because Honda has failed to get on the EV bandwagon. Honda and Mazda may be victims of the surge of EVs soon to come from China, Europe and Tesla. Other Asian carmakers such as Toyota and Hyundai are doing much better getting onboard the EV/Hybrid train though.

justtopost 8y ago
Honda is doing fine, and was early into the hybrid market. Whatever are you on about? The only missteps was their zev hydrogen tech which doesn't make engineering sense (to me), and a black eye from bad v6 transmissions for way too long in the 90s thru 00s, and a departure from small, low-displacement, high efficiency, well handling cars with sla suspension for pigfat appliances with cheap mcstrut suspension and more wings. Lucky for them, the world is a bit pigfat and risk adverse themselves, and still buy CRVs like crazy. While the 88-01 civic, and s2000 still somehow support their reputation in enthusiast circles thanks to those now purely nostalgic qualities. But I digress. I think ICE cars will continue to serve a purpose. Mazda just announced a new rotary ICE hybrid engine design this week! If self-driving tech takes off, it will be applied just as easily to either tech. I see Honda at no major positional disadvantage here.
- mywittyname 8y ago
  MacPherson struts are fine. Even the most ardent enthusiast has difficulty telling the difference between a MP setup and a double wishbone. BMW uses them and Porsche uses them on their GT# 911s. You'd think if there were a case to be made for the performance demerits of a MP setup, Porsche wouldn't be using them on their halo cars (or their class-winning race cars).
- cjhanks 8y ago
  Initial cars will have a reasonably high power consumption requirement. Vehicles with adequate voltage supply will probably have an advantage compared to less sophisticated energy distribution.
- 8y ago

cjhanks 8y ago

Can somebody explain why GM would want to provide competitive advantage to its competitor for a fixed price? Either GM has licensing fees in its future, or the project is proving to be too capital intensive. Or could there be an effort towards a consortium? Most of the major talent in the field is gainfully employed. I simply do not fully understand the objective of all of this capital raising. I look forward to better understanding the strategy in the rear view mirror.

cmrdporcupine 8y ago
GM has provided engines for other manufacturers for years, so is it really that different?
sjg007 8y ago
Honda cars and gm trucks
wittyusername 8y ago
I think one issue is that, like VR, one bad actor sours the consumer appetite for the entire concept. I think a safer road for GM is to become the de facto A+ supplier of tech that works well than for 2/3 of the legacy industry to have janky half-working sorta-dangerous solutions in 2025.