GM teams up with Microsoft for EVs
San Francisco, US - General Motors (GM) announced an alliance on Tuesday with Microsoft on its Cruise autonomous driving venture, combining forces to challenge Tesla and others in an electric car market expected to rev with Joe Biden’s environment-friendly administration in the White House.
The companies have established ‘a long-term strategic relationship’, and Microsoft will join GM, Honda and institutional investors in a new US$2bn equity investment round, GM and its Cruise subsidiary said in a press release.
“This is a major shot across the bow from Microsoft to Tesla and Waymo and other EV (electric vehicle) autonomous players that Redmond is on its way,” said Wedbush analyst Dan Ives.
“There is an arms race in the EV world and this is the latest collaborative deal with many more on there way, speaking to this trillion dollar market over the next decade.”
Ives and others think Apple is poised to begin putting its technology to work in self-driving, electric cars although the iPhone maker has remained mum on the subject.
Microsoft Azure is a powerhouse in the cloud computing market, so synching GM electric vehicles with Azure computing and artificial intelligence capabilities promises a boon for the car maker, Ives reasoned.
Microsoft also will provide hardware and software engineering support to GM as part of the alliance, which values Cruise at some US$30bn.
“Our mission to bring safer, better, and more affordable transportation to everyone isn’t just a tech race - it’s also a trust race,” Cruise chief executive Dan Ammann said.
“Microsoft, as the gold standard in the trustworthy democratisation of technology, will be a force multiplier for us as we commercialise our fleet of selfdriving, all-electric, shared vehicles.”
Microsoft CEO Satya Nadella said the venture will help GM and Cruise to ‘scale and make autonomous transportation mainstream’.
Last week, GM announced plans to build a fleet of new electric vans.
The partnership comes on the heels of a series of GM announcements to reposition the Detroit giant to compete with Tesla and other newer players.
“It makes a lot of sense,” said Edmunds executive director of insights Jessica Caldwell.
“Microsoft and General Motors, both massive, historical American companies, tackling a problem that companies around the world are working on.”
Companies such as GM are still trying to figure out what the self-driving car of the future looks like, Caldwell added.
Perhaps seats will face each other as in train cars, or there will be no need for front windows or driver seats.
Electric vehicle maker Rivian separately said it raised US$2.65bn in a new funding round valuing the Amazonbacked US firm at US$26.7bn.