Honda is taking a stake in General Motors subsidiary Cruise Holdings as part of a plan for the Japanese and American automakers to work together developing and building an autonomous vehicle.
The investment of $2.8 billion over the next 12 years includes Honda paying GM $750 million immediately as it takes a 5.7 percent stake in Cruise Holdings.
General Motors said the Honda investment puts the Cruise valuation at $14.6 billion. It comes just months after Softbank's Vision Fund invested $2.25 billion in the GM unit.
Together, GM and Honda will develop and build a wide-use autonomous vehicle intended to be deployed worldwide. The vehicle will be manufactured at a General Motors plant, though no date has been set yet for deployment of the vehicle.
"This is the logical next step in General Motors and Honda's relationship, given our joint work on electric vehicles, and our close integration with Cruise," said General Motors Chairman and CEO Mary Barra.
"Together, we can provide Cruise with the world's best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology – while they move to deploy self-driving vehicles at scale."
The move comes at a time when automakers around the world are making multibillion investments and long-range plans for rolling out autonomous-vehicles. Many analysts believe the widespread adoption of these vehicles will likely start to pick up starting in 2021 or 2022.
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