Lyft has agreed to sell its Level 5 self-driving car division to a subsidiary of Toyota Motor Corp. for about $550 million in cash, the company announced this week.
Lyft also signed a non-exclusive commercial agreement with Woven Planet, the Toyota subsidiary, “for the utilization of Lyft system and fleet data to accelerate the safety and commercialization of the automated-driving vehicles that Woven Planet will develop,” according to Lyft.
The companies expect the deal to close in the third quarter of 2021, pending regulatory review and other closing conditions. Lyft would pay Woven Planet $200 million in cash up front, and an additional $350 million over the next five years, according to Lyft. Lyft estimated the sale would reduce costs, primarily in research and development, by about $100 million annually.
“Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this partnership will help pull in our profitability timeline,” Lyft co-founder and president John Zimmer said in a statement. “Assuming the transaction closes within the expected timeframe and the Covid recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.”
Lyft competitor Uber in December announced it had agreed to sell its Advanced Technologies Group self-driving car unit to autonomous car startup Aurora Innovation.