Walmart and Cruise will begin testing driverless car deliveries from 2021.
Walmart invests in a new $ 2.75 billion financing for the company in Cruise, the majority self-propelled subsidiary of General Motors.
The investment decision will be made approximately five months after the companies begin developing a pilot program for using self-driving cruise vehicles for delivery in Scottsdale, Arizona.
“This investment is a milestone for us – it shows our commitment to bring the benefits of self-driving cars to our customers and businesses,” said John Furner, CEO of Walmart US, in a blog post Thursday. “We are excited to join Cruise’s already impressive partner and investor ecosystem with GM, Honda and Microsoft to pioneer this emerging technology.”
According to Furner, Walmart was “impressed with Cruise’s differentiated business model, unique technology and unmatched driverless testing.” Walmart has announced partnerships with six autonomous vehicle manufacturers, including Cruise, Ford Motor and Waymo, which are owned by Alphabet. The pilot with Cruise is still in development, but the investment is a strong vote of confidence in the company.
A Walmart spokeswoman said she would continue to work with other autonomous vehicle manufacturers despite investing in Cruise.
Cruise’s investment round was originally announced in January at $ 2 billion. These included Microsoft, GM, which Cruise acquired in 2016, and other institutional investors. The additional investment, according to the company, includes Walmart and other institutional investors.
Cruise declined to break down the new funding by company. That puts Cruise’s valuation at over $ 30 billion.
“Self-driving cars will make transportation safer, cleaner and more accessible for everyone,” said Dan Ammann, Cruise CEO, in a statement. “It takes a clear mission, world-class talent, great partners and a lot of capital to achieve this.”
Commercializing autonomous vehicles has been far more difficult than many predicted a few years ago. The challenges have led to a consolidation of the autonomous vehicle sector after years of touting the technology as the next multitrillion dollar market for transportation companies.
Some companies like Uber Technologies have given up in-house development of the systems while others like Zoox have been sold to Amazon. Alphabet’s Waymo remains the best-known leader and operates a public autonomous vehicle fleet in Arizona
Walmart’s inclusion comes days after Cruise announced plans to expand operations to Dubai in 2023 to be the city’s exclusive provider of self-driving taxis and hail services by 2029.
This week’s announcements are significant to Cruise, which has concentrated its self-driving vehicle testing in San Francisco. The company has expanded its registered test fleet to more than 200 vehicles, but has not yet announced when it plans to offer a fleet of Robotaxi to the public in the city. This was originally planned for 2019.
Mary Barra, GM’s CEO, said last month the company was “confident” that Cruise would go live and commercialize “sooner than many think”.
– CNBC’s Melissa Repko contributed to this report.