GM Pulls The Plug On Cruise Robotaxi Business – CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

---

In a press release on December 10, 2024, General Motors announced it was shutting down Cruise, its robotaxi business. GM said it “plans to realign its autonomous driving strategy and prioritize development of advanced driver assistance systems on a path to fully autonomous personal vehicles. GM will build on the progress of Super Cruise, the company’s hands-off, eyes-on driving feature, now offered on more than 20 GM vehicle models and currently logging over 10 million miles per month.

“GM intends to combine the majority-owned Cruise LLC and GM technical teams into a single effort to advance autonomous and assisted driving. Consistent with GM’s capital allocation priorities, GM will no longer fund Cruise’s robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.”

CEO Mary Barra said, “GM is committed to delivering the best driving experiences to our customers in a disciplined and capital efficient manner. Cruise has been an early innovator in autonomy, and the deeper integration of our teams, paired with GM’s strong brands, scale, and manufacturing strength, will help advance our vision for the future of transportation.”

“As the largest U.S. automotive manufacturer, we’re fully committed to autonomous driving and excited to bring GM customers its benefits — things like enhanced safety, improved traffic flow, increased accessibility, and reduced driver stress,” said Dave Richardson, senior vice president of software and services engineering.

The press release continued, “GM, which owns about 90% of Cruise, has agreements with other shareholders that will raise its ownership to more than 97%. The company will pursue the acquisition of the remaining shares. Contingent upon the repurchase of these shares and Cruise board approval, GM will work with the Cruise leadership team to restructure and refocus Cruise’s operations. GM expects the restructuring to lower spending by more than $1 billion annually after the proposed plan is completed, expected in the first half of 2025.”

That’s The News From GM. Here’s The Fall Out

The Detroit Free Press reports this announcement comes after GM spent much of this year telling Wall Street that Cruise was inching closer to restarting its driverless robotaxi business. Cruise had halted all services and recalled its vehicles in 2023 after an incident in October of that year in San Francisco. A vehicle hit a pedestrian, pushing her into an oncoming Cruise self-driving car, which then dragged her several feet, leaving the woman critically injured. But in May of this year, GM said Cruise resumed supervised autonomous driving in Phoenix. As of June, Cruise was operating fleets in Dallas and Houston as well.

GM has invested at least $10 billion in the Cruise robotaxi business since 2016 but has never gotten a return on its investment. The company expects this restructuring to lower its spending by more than $1 billion annually after the proposed plan is completed, which is expected in the first half of 2025. During an investor’s call after the announcement, GM CFO Paul Jacobson said, “Over the past year, we’ve been assessing our self-driving strategy.” He said continuing down the path of deploying, maintaining, and operating a robotaxi fleet would require a heavy capital investment on top of “the $10 billion we’ve already invested in it. The better use is to pursue improvements to L3 and ultimately in L4 in a personal model because that’s more aligned with the capital and working needs of the business going forward.”

One of the outside investors in Cruise is Honda, which told CNBC it had planned to launch a driverless ride-hailing service in Japan in early 2026. But now it will reassess those plans and make adjustments as needed. “Honda remains committed to various research and development initiatives aimed at providing new mobility solutions to our customers in Japan,” a Honda spokesperson said. Honda said its total investment in Cruise was $852 million.

“You have to understand the cost of running a robotaxi fleet, which is fairly significant, and it’s not our core business,” Barra said during the conference call. “The technology has developed such that … we’ve seen an opportunity where we think we can work more quickly with focusing on personal autonomous vehicles and bringing the teams together.”

GM Are A Bunch Of Dummies

Actually, Mary, it was not investors who needed to understand that, it was the senior executives at General Motors like yourself who failed to learn that lesson. Cruise founder Kyle Vogt, who left the company in November 2023, posted on X after the announcement, “In case it was unclear before, it is clear now — GM are a bunch of dummies.” In October of last year, shortly before Vogt left the company he started, Cruise grounded its fleet if robotaxis in San Francisco after one of its cars dragged a pedestrian a short distance, as explained above. The National Highway Traffic Safety Administration fined Cruise $1.5 million after the company failed to disclose details of a serious crash that month involving a pedestrian.

A third party probe into the incident ordered by GM and Cruise found that culture issues, ineptitude, and poor leadership fueled regulatory oversights that led to the accident. If only companies could be run by robots instead of humans with all their foibles! The probe also investigated allegations of a cover-up by Cruise leadership but found no evidence to support those claims. In July of this year, GM announced it would indefinitely delay production of the Origin autonomous vehicles it was developing, which led to the valuation of the company being cut roughly in half. At that point, Cruise began to focus on using the next-generation Chevrolet Bolt to develop its autonomous vehicles.

Still Plenty Of Robotaxi Companies

While Cruise’s operations were on hold in San Francisco, its robotaxi rivals gained ground elsewhere. Waymo, the rohotaxi arm of Alphabet, began operating its commercial robotaxi services across several major US metro areas. Last week it announced plans to expand into Miami, with Atlanta and Austin soon to follow. Chinese autonomous vehicle makers including Pony.ai and WeRide have rolled out in overseas markets as well. Wayve, which is funded by SoftBank, is testing its autonomous vehicles in San Francisco. Zoox, which is owned by Amazon, is testing autonomous vehicles which do not feature steering wheels in several US cities including San Francisco.

Tesla, of course, is now promising that a self-driving Cybercab will go into production sometime before the next millennium. It is interesting to think of all the time, effort, and money that has been spent because of ideas that originated with Elon Musk. The Hyperloop was the result of a brain fart Elon had while stuck in traffic on the way to LAX one day. The whole auto industry was gobsmacked by the touchscreen in the Model S and immediately decided their cars, too, must be computers on wheels. And Tesla really got the self-driving car thing going when it introduced Autopilot on the Model S in 2014, then ramped up expectations when Elon promised in 2016 that a Tesla would soon drive from LA to NYC without human assistance. (That hasn’t happened yet.)

In all, hundreds of billions of dollars have been spent trying to get out ahead of Musk’s ideas by corporations seduced by the fear of being left behind on the way to the next new thing. GM may be a bunch of dummies, but they are hardly alone. Group think and herd mentality seem to be the operative forces at work in most industries today.