GM’s Cruise Is Valued At $19 Billion — Does That Make Any Sense?

The self-driving vehicle startup Cruise that GM acquired in 2016 was recently valued at $19 billion after another round of investments.

That puts Cruise’s valuation at more than half the value of Tesla, and 38% the value of GM as a whole (as of this moment).

That implies, of course, that certain portions of the investment world expect a lot from Cruise, and think it is well on its way to a promising future.

I find the whole thing tremendously interesting. I understand that some auto industry players think Cruise as the perfect approach to autonomous driving, but others think it has fatal flaws and will never outcompete what Tesla is developing. Fine and good — there are differences of opinion in the auto world, and more specifically in a burgeoning new new industry that most consider to be the future. But it still blows my mind a little bit that very little money is invested in the idea Tesla is the world’s autonomous driving leader while Cruise is being valued at $19 billion.

First, though, a few more details on the news. GM raised “an equity investment of $1.15 billion from a group comprising institutional investors, including funds and accounts advised by T. Rowe Price Associates, Inc., and existing partners General Motors, SoftBank Vision Fund and Honda.” The result: “This investment increases Cruise’s post-money valuation to $19.0 billion, inclusive of SoftBank Vision Fund’s previously announced investment commitment. In the last year, Cruise has secured capital commitments totaling $7.25 billion.”

From what I’ve gathered, Cruise’s autonomous driving architecture is much more similar to Waymo’s than Tesla’s. We’ve never done a deep dive on Cruise versus Tesla Autopilot/Full Self Driving, but we have published these comparisons of Tesla’s system with Waymo’s:

• Tesla Autopilot Hits 1 Billion Miles! & Why Tesla Autopilot Is The Top Approach To Autonomy
• Deep Dive Into Tesla’s Autopilot & Self-Driving Architecture vs Lidar-Based Systems

Aside from those, the following may bring some useful light to the overall story:

• Tesla vs. Self-Driving Competition — New MIT Video
• Elon Musk Calls Lidar “A Fool’s Errand” … & Other Autonomous Driving Experts Starting To Agree
• Tesla Autopilot Miles Soaring
• Tesla Autonomy Day: What We Learned
• Tesla Autonomy Day Video & Dozens Of Quotes

See more in our Tesla Autonomy Day archives.

Is Cruise worth $19 billion? Well, I certainly couldn’t tell you. Should it be worth $19 billion when Wall Street hardly values Tesla’s autonomous driving leadership? Well, that seems crazy to me, but such is the market today.