Toyota Motor Company has just announced an investment in self-driving vehicles. While the concept is certainly not foreign, the direction of this investment may be surprising. Apparently Toyota is teaming up with Japanese auto-parts supplier Denso to invest $667 million in Uber’s self-driving fleet. Combined with another $333 million from Softbank’s Vision Fund, the total investment, in this round, is about $1 billion. Softbank, of course, is already the largest shareholder of Uber stock, and Toyota invested $500 million just last year.
Combined, then, this investment values the Advanced Technologies Group division (ATG) at approximately $7.25 billion. Furthermore, the investment will create a newly formed corporate entity within Uber, with its own board of directors.
Of course, this is par for course for just about any company who recently launched an IPO, as Uber did last week. Many companies wait to go public until they are sure their investments are heading in the right direction with the right momentum to attract a larger pool of smaller investors looking to accompany a new firm on its way to the top.
Accordingly, Uber CEO Dara Khosrowshahi notes, “This investment and our strong partnership with the Toyota Group are a testament to the incredible work of our ATG team to date, and the exciting future ahead for this important project, alongside great partners. The development of automated driving technology will transform transportation as we know it, making our streets safer and our cities more livable. Today’s announcement, along with our ongoing OEM and supplier relationships, will help maintain Uber’s position at the forefront of that transformation.”
The move from Uber and Toyota come at quite a crucial moment in this industry as smaller ride-sharing competitor Lyft also went public recently. Unfortunately, Lyft has struggled in the public market as investors attempt to justify heavy losses and its rocky path to profitability amidst an industry that is still growing (and remains extremely popular).
As such, Toyota executive vice president Shigeki Tomoyama—who is also the president of Toyota’s in-house Connected Company—comments, “Leveraging the strengths of Uber ATG’s autonomous vehicle technology and service network and the Toyota Group’s vehicle control system technology, mass production capability and advanced safety systems—such as Toyota Guardian—will enable us to commercialize safer, lower cost automated ridesharing vehicles and services.”
With that, Toyota has also revealed a plan to contribute another $300 million over the next three years to help flourish the newly-formed unit.