Honda will invest $2.75bn (£2.1bn) and take a stake in General Motors self-driving unit, GM Cruise, as firms continue to team up in the race to develop autonomous vehicles.
The Japanese carmaker said it wants develop a self-driving car that could be manufactured at high volume.
Earlier this year, Japan’s Softbank invested $2.25bn in GM Cruise.
Honda’s shares were up 1.2% in early Tokyo trade following the announcement and GM’s shares rose 2.1% in the US.
Honda will contribute approximately $2bn over 12 years to self-driving vehicle initiatives, which together with a $750m equity investment in Cruise, brings its total commitment to the project to $2.75bn, the two firms said in a statement.
Analysts have said that GM is among the leaders in the development of self-driving vehicles.
Honda’s investment in GM Cruise, together with Softbank’s recent investment, values the firm at $14.6bn.
GM was criticised for overpaying for it when it bought a majority stake in the start-up two years ago for $1bn.
Founded by engineer Kyle Vogt in 2013, San Francisco-based Cruise developed Chevy’s first driverless cars, some of which are still on the roads in the US.
Amid the many concerns over the safety of autonomous vehicle technologies, GM Cruise argues the technology they are working on allows self-driving cars to see more than a human driver would.
In each car, 10 cameras are installed that take pictures at a frequency of 10 shots per second, the firm says.
“We see more of what is going on around the car at any given time than a driver can,” GM Cruise said.