GM’s Cruise Is Valued At $19 Billion — Does That Make Any Sense?
June 6th, 2019 by Zachary Shahan
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.
About the Author
Zachary Shahan Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.
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