Morningstar

In Smart Move, GM Adds Honda to Cruise AV Partnership

We like the deal because it gives Cruise even more cash to scale up quickly without further using GM's funds.

Securities In This Article
Honda Motor Co Ltd ADR
(HMC)
General Motors Co
(GM)

We are not changing our fair value estimate for

buying EV batteries from GM.

We like the deal because it gives Cruise even more cash to scale up AVs quickly without further using GM's funds. We think it's also possible Honda's presence, as well as Cruise's partnership with Japan's SoftBank, announced May 31, means GM can more easily access the Japanese market for AV services next decade. The deal also supports our view that GM Cruise is a leading AV player. Honda Executive Vice President Seiji Kuraishi said in the media release "Honda chose to collaborate with Cruise and General Motors based on their leadership in autonomous and electric vehicle technology and our shared vision of a zero-emission and zero-collision world." We don't expect funding to get in the way of Cruise meeting its goal of launching AV ride-hailing at scale next year, likely in San Francisco, and perhaps New York and Phoenix, to start.

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About the Author

David Whiston, CFA, CPA, CFE

Strategist
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David Whiston, CFA, CPA, CFE, is a strategist, AM Industrials, for Morningstar*. He covers stocks in the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007. He writes stock reports, ad hoc reports, stock analyst notes, and builds discounted cash flow models for each company covered. He also assesses their economic moat and makes frequent television and print media appearances in local, national, and international news outlets. Key stocks covered include GM, Ford, CarMax, and all six publicly traded franchise auto dealers, such as AutoNation and Penske Automotive Group.

Before joining Morningstar in 2007, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence, gaining experience around assessing an asset’s cash flow.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond’s Robins School of Business. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner.

In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011 .

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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