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Business deals

Toyota and SoftBank tackle self-driving costs with Uber

Japanese partners form a tighter 'family' through $1bn infusion

Toyota will contribute up to $300 million to fund Uber's quest to develop and commercialize automated ride-sharing.   © Uber Technologies

NAGOYA, Japan -- SoftBank Group and Toyota Motor aim to bring the sky-high costs of developing autonomous mobility down to earth by joining Uber Technologies' push for the technology.

The SoftBank Vision Fund, Toyota and the automaker's supplier affiliate Denso collectively will invest $1 billion in Uber Advanced Technologies Group for a nearly 14% stake. 

Toyota will also contribute up to $300 million in additional funding over the next three years to underwrite Uber's research and development. The two sides will jointly develop the self-driving kits needed to mass-produce autonomous vehicles for ride-hailing services. Denso, which manufactures auto parts, will collaborate in developing sensors, cameras and other principal components.

Prohibitively high development costs make such collaboration inevitable. The technology packed into autonomous ride-hailing vehicles would drive the cost of each auto to "tens of millions of yen" (10 million yen equals $89,000) once they hit the market, said Masayoshi Son, SoftBank Group's chairman and CEO.

While SoftBank and Uber both have financial power, Toyota and Denso can offer expertise in cost reduction and mass production.

The investment in Uber ATG also represents a new phase in the collaborative relationship between Toyota and SoftBank. 

The companies have separately acquired stakes in Uber and rivals such as Southeast Asia's Grab, but this is the first time the two Japanese companies invested in a target at the same time. Last fall, the pair agreed to establish a joint venture intended to roll out on-demand buses and similar transportation services. 

Toyota commands what President Akio Toyoda calls "real-world competitive advantage" in its manufacturing base along with sales and maintenance networks, while SoftBank, as stakeholders in ride-share companies, controls 90% of the market in terms of the number of rides. When SoftBank Group announced its tie-up with Toyota last fall, Son said the two companies will form a "family" through the joint venture.

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