GM’s Chevy Bolt can navigate the busy streets of San Francisco at speeds up to 25 miles per hour. The Detroit automaker is so confident that it plans to run a ride-hailing pilot next year in a car with no steering wheel or pedals, something only Waymo has done in road testing.
A handful of major players have demonstrated similar driving capabilities. It’s hard to say anyone has an edge. But there are two big advantages for GM.
SoftBank made a $2.25 billion investment in GM’s Cruise Automation unit on May 31, in addition to a fresh $1.1 billion from GM. The new cash is meant to help GM launch a self-driving business, and it marks a big vote of confidence from a deep-pocketed investor. SoftBank picked GM over a slew of startups and rival automakers. The partnership could also get GM a warmer reception from the ride-hailing firms Uber Technologies Inc. and Didi Chuxing, since SoftBank owns a piece of both.
Unlike startups and tech competitors, GM also has a factory north of Detroit that can crank out self-driving Bolts. That will help the company get manufacturing right and lower costs without relying on partners. Right now, an autonomous version of the car costs around $200,000 to build, compared to a sticker price of $35,000 for an electric Bolt for human drivers.
Where GM lags Waymo is speed. GM doesn’t test faster than 25 miles per hour, deeming that the safest top speed. Kyle Vogt, founder and chief executive of GM’s Cruise Automation unit, said his program will soon be using new Lidar developed by Strobe, which the automaker acquired last year. Lidar sends out laser beams to map the road ahead and guide the car, and Strobe’s version is smaller, cheaper and can see farther ahead than GM’s existing equipment. That will enable faster driving.
The new equipment will also cut costs. Lidar alone on the current generation of autonomous Bolts costs about $30,000 a car, Vogt said in November. When GM starts using Strobe, Vogt said, the cost will drop to “hundreds of dollars.”
Before the SoftBank investment, GM planned to spend $1 billion of its $8 billion annual capital expenditure budget to develop self-driving cars and mobility services. GM has not decided whether to run its ride-share pilot, slated for late 2019, on its own or to join forces with an established player. It’s worth noting that the automaker already has a stake in Lyft Inc.
There’s a big caveat with GM: It leads all companies that test in California when it comes to fender benders. Last year, Cruise had 22 of the 27 accidents in the state involving driverless cars, and it experienced five of the seven incidents reported this year. The accidents have mostly been minor and not the fault of GM’s car. In an interview, GM President Dan Ammann attributed the higher incident rate to the greater number of miles traveled in San Francisco’s busy streets.
Staying Close
Mercedes-Benz started selling an adaptive cruise-control system in the late 1990s on its flagship S-class sedan. The system could sense when the car was bearing down too quickly on someone’s rear bumper up ahead.
Today, Mercedes models with Intelligent Drive get closer to real self-driving because the system can help steer clear of pedestrians and avoid other accidents. It’s one reason why Navigant Research, which studies auto technology, ranked parent company Daimler third behind Waymo and GM.