Toyota is accelerating its self-driving ambitions by purchasing Lyft’s autonomous vehicle company for more than half a billion dollars.
Lyft has sold its autonomous vehicle unit for $550 million. This comes as the latest in a series of acquisitions prompted by the high cost and long timelines needed to commercialize autonomous vehicle technology.
Woven Planet Holdings, a subsidiary of Toyota, has acquired Lyft’s self-driving division, Level 5, for $550 million, out of which $200 million was provided to Lyft upfront and the rest will be paid over the span of five years. Woven Planet and Lyft have also signed commercial agreements to use the Lyft system and fleet data to improve the safety and commercialization of automated driving technology. “This acquisition advances our mission to develop the safest mobility in the world at scale. The Woven Planet team, alongside the team of researchers at TRI, have already established a center of excellence for software development and technology in the Toyota Group,” said James Kuffner, the CEO of Woven Planet.
In recent years, Toyota has made significant investments to modernize its lineup. It reclaimed its position as the world’s largest automaker in terms of revenue last year, surpassing Volkswagen (VLKAF). In Japan, the company is also constructing a new smart city that will include streets “dedicated to autonomous driving.” Toyota unveiled its plans for the “Woven City” project in February, which is located at the foot of Japan’s Mount Fuji. The laboratory city, built on the site of a disused Toyota factory, will enable future technological development and testing.
The city, according to Euromonitor consultant Razvadauskas, is another example of Toyota’s ambitions in autonomous vehicles, as it will allow self-driving car testing.
He added that the Lyft deal enhances the company’s “vision of being a market pioneer in self-driving technology.”
The sale will remove a costly annual expense from Lyft’s budget. The ride-hailing company said it plans to save $100 million in annualized non-GAAP operating expenses on a net basis by offloading Level 5. Lyft’s savings will be vital as it strives for sustainability, as co-founder and president John Zimmer pointed out in his announcement.
The move is similar to Uber’s decision earlier this year to sell off its autonomous driving division to Aurora, a Silicon Valley tech firm backed by Amazon. This is becoming somewhat of a trend as big ridesharing companies continue to whittle down their company portfolios in order to save on operating costs.