GM & Honda Partnership Looks to Close the AV Gap With Waymo

The autonomous-vehicle partnership between Honda and GM’s Cruise subsidiary could help to get driverless cars on the road in many countries in the next few years, though consumers probably won’t be able to buy one and take it home.

On Wednesday, the companies announced Honda will invest $2.75 billion in Cruise over the next 12 years and contribute to the development of a purpose-built driverless vehicle. The partnership brings two of the world’s largest automakers together in pursuit of AVs, while also earning Cruise its second big outside investment this year, after Softbank’s $2.25 billion commitment in May.

GM Cruise is already manufacturing self-driving cars, in the form of modified Chevrolet Bolt hatchbacks that were built for human drivers. Along with Honda, Cruise will now produce a vehicle that’s designed from the beginning to be driverless, which should make for more efficient use of interior room. A dark, selectively lit rendering of this concept shows a box-like design.

That car will probably come out in about three years, Navigant Research analyst Sam Abuelsamid told TU Automotive. (The companies didn’t give any specific timings.) But it’s likely to be designed and delivered exclusively for services such as ride-hailing and deliveries, industry analysts say. A simple, box-like interior could be reconfigured for different purposes.

Fleet use takes the lead partly because the cost of a self-driving car — and of frequent software updates — will still be out of reach for most consumers, Abuelsamid said. However, the partnership promises to help reduce vehicle cost through higher-volume manufacturing, spreading the cost of development over more vehicles. That will be key to making driverless cars commercially viable, even for shared services.

GM and Honda bring complementary strengths to the partnership. In a press release, Honda cited GM’s AV technology and Honda’s expertise in space efficiency. Honda got a late start in self-driving and lags behind most of the top automakers, analysts say.

“It’s definitely big for Honda to get into this game much more quickly,” Abuelsamid said.

The deal also combines the geographic reach of both companies, Abuelsamid said: GM has very little presence in Japan, where interest in AVs is high. Honda can help to get vehicles into that market, as well as Europe, where GM backed out last year by selling its Opel and Vauxhall subsidiaries. Meanwhile, GM is a far bigger player than Honda in China, he said.

The companies are natural partners in that they have been collaborating on fuel-cell and battery technology for some time, Gartner industry analyst Michael Ramsey said. They tend to work well together, partly because they don’t often compete for the same customers, even in the US, he said.

Other carmakers are likely to have purpose-built AVs out around the same time. For example, Ford and BMW have also targeted 2021. The company to beat is still Waymo, which started earlier than anyone else when it was Google’s self-driving car project. Cruise is right behind, and it gains by joining with Honda, Ramsey said.

“It helps close the gap, for sure,” Ramsey said. There are likely to be more big alliances like this one as weaker AV players team up with stronger ones, he said. Waymo had said it was partnering with Honda, but that appears to be over. “Honda has committed to collaborate exclusively with General Motors and Cruise,” a Cruise spokesman wrote in an email to TU Automotive.

One big uncertainty, as companies prepare to introduce driverless cars around 2021, is whether they’ll be allowed to put them on the road. In the US, any federal law setting up a system for approving large numbers of AVs probably won’t pass until at least next year, Abuelsamid said. To do a global rollout, manufacturers will need to meet many different regulations that have yet to be formulated.

— Stephen Lawson is a freelance writer based in San Francisco. Follow him on Twitter @sdlawsonmedia.