RBC is valuing General Motors’ autonomous driving unit, Cruise, at a whopping $43 billion. That is up from its $11.5 billion valuation it received just a few weeks ago. That valuation came when SoftBank invested in Cruise back in May. SoftBank invested around $2.25 billion in the autonomous driving unit. After SoftBank invested in the unit, GM had reportedly been looking to spin off the unit, or create a tracking stock for Cruise, allowing it to trade on the NYSE. RBC’s autos analyst, Joseph Spak stated that “we doubt SoftBank would have invested if they didn’t see a much larger opportunity”. And SoftBank has almost quadrupled its money since investing, and that was less than two months ago.
GM bought Cruise almost two years ago for just $1 billion, so GM has definitely made their money back on this acquisition. Cruise is a self-driving car company that GM became interested in, to help propel its own self-driving car initiative. Cruise is expecting to have over 800,000 self-driving vehicles on the road by 2030, driving over 58 billion miles by that year. It’s the biggest competitor to Alphabet’s self-driving division, Waymo, which has driven the most miles on public roads, and also has the least accidents right now.
RBC did upgrade GM’s stock price target, bringing it to $53 a share. Cruise is said to be worth about $7 a share of that share price, given the fact that GM does own 80-percent of the company, and not the entire company. It’ll be interesting to see whether GM does decide to spin off Cruise or create a tracking stock for the company, in the near future. Given that the current valuation of Cruise is around $43 billion, it also wouldn’t be that surprising to see it jump to over $100 billion before the end of the year. In fact, at this pace, it may pass that figure in the next couple of months.