GM will no longer fund Cruise’s robotaxi development

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At the height of its success, Cruise was running robotaxi services in San Francisco, Austin, Houston, and Phoenix. | Source: Cruise

General Motors (GM) today announced that it will no longer fund Cruise LLC’s robotaxi deployment work. It cited long development times, high costs, and an increasingly competitive robotaxi market as the reasons behind its decision. 

Since acquiring the self-driving startup in 2016, GM has poured more than $10 billion of funding into Cruise. In June, for example, GM invested another $850 million into the self-driving startup, despite it losing $3.48 billion in 2023. Now, GM said it will combine the Cruise and GM technical teams into a single effort to advance autonomous and assisted driving. The companies have not determined how many of Cruise’s employees will move to GM with the change. 

“GM is committed to delivering the best driving experiences to our customers in a disciplined and capital-efficient manner,” said Mary Barra, the chair and CEO of GM. “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.”

GM currently owns around 90% of Cruise and has agreements with other Cruise shareholders that will raise its ownership to 97%. It plans to acquire the remaining shares so it can restructure and refocus the company’s operations. It hopes to have this completed by the first half of 2025. GM expects the restructuring to lower spending by more than $1 billion annually after the proposed plan is completed.

Once GM has full ownership of Cruise, it said it will realign its autonomous driving strategy and prioritize developing 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 said.

Cruise fails to recover from 2023 road bumps

When Cruise was most successful, it was running services in San Francisco, Austin, Houston, and Phoenix, and had plans to expand to more than a dozen cities in 2024. According to co-founder and former chief product officer Dan Kan, Cruise was completing up to 10,000 autonomous rides per week.

However, the company faced a number of struggles in 2023, culminating in an Oct. 2 incident when one of Cruise’s vehicles dragged a pedestrian 20 feet after she was hit by another driver. After the accident, the California Department of Motor Vehicles (DMV) suspended Cruise’s permits in the state, alleging that the company withheld footage of it.

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Cruise disputed the allegation but paused nationwide operations to reestablish trust with the public. Since then, the city of San Francisco filed a lawsuit against the California Public Utilities Commission (CPUC), the organization responsible for regulating autonomous vehicles (AVs) in the state, to drastically reduce the number of robotaxis on the city’s roads. In May 2024, Cruise reached a settlement with the pedestrian for between $8 million and $12 million, according to Bloomberg News. 

Cruise did resume manual driving in Houston and Dallas and announced that supervised driving is underway in Phoenix and Dallas. It also began manual operations in Phoenix in April, but this wasn’t enough to keep GM from pulling the plug. 

Other robotaxi developers take center stage

Waymo has long been Cruise’s biggest competitor and is now the clear frontrunner when it comes to robotaxi deployments. The self-driving unit of Alphabet last week announced it will begin testing its robotaxis in Miami in early 2025. 

The company has spent 2024 expanding its robotaxis across multiple cities, including San Francisco and Phoenix, where it provides curbside service at Sky Harbor International Airport. It also released its 6th generation robotaxi, equipped with an optimized sensor suite for greater performance at a reduced cost. Most recently, Waymo removed its LA waitlist and opened its service fully to the public.

Other competitors include Nuro, which recently expanded its driverless capabilities using zero-occupant vehicles with the Nuro Driver system, and Zoox, which recently expanded its operations in California and Nevada. 

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