GM Scraps Its Cruise Robotaxi Program, Cites Costs

"General Motors has scrapped its Cruise robotaxi program after nearly a decade and $10 billion in development, citing the time and costs needed to scale the business and rising competition.

GM on Tuesday said it plans to realign its autonomous driving strategy and give priority to development of advanced driver assistance systems, which take over steering and other functions in certain situations and are common on new vehicles today.

The automaker said it would continue to develop fully autonomous technology for personal vehicles, and build on the progress of its Super Cruise system, a hands-off, eyes-on driving feature that the company introduced several years ago.

GM said it owns about 90% of Cruise and intends to buy out the remaining investors. It plans to combine the technical teams from Cruise and GM into a single effort to advance autonomous and assisted driving.

"We want to leverage what already has been done as we go forward in this," Chief Executive Mary Barra told analysts on a call Tuesday.

The Detroit automaker said it expects the restructuring to reduce spending by more than $1 billion annually after the proposed plan is completed, which is expected in the first half of next year.

GM shares rose about 3% in aftermarket trading.

Cruise over the years had been viewed as among the leaders in efforts to commercialize driverless cars and deploy them in Uber-like fleets for paying customers. The company suffered a major setback last year, however, after an accident in California prompted it to pull its robotaxis from several markets to refine the system.

GM in recent months had resumed testing of its robotaxis in some cities. On Tuesday, it cited "an increasingly competitive robotaxi market" as a reason for its decision to abandon the effort.

Waymo, owned by Google-parent Alphabet, is considered by many analysts to be furthest along in development and as of October was logging about 100,000 rides a week in California and Phoenix. Tesla has said it plans to start producing its driverless Cybercab by 2027.

Major carmakers piled into the driverless-car space about a decade ago, in what was seen as a race with Silicon Valley to revolutionize the way people and goods move around. GM and others struck deals with upstart firms and set ambitious deadlines to commercialize the technology.

Companies struggled to perfect their autonomous systems though and many missed their timelines to introduce driverless services. Accidents involving fully and partially automated cars, including a fatal collision involving a driverless Uber in 2018, also set back the efforts.

Other traditional automakers have stepped back from their driverless-car pursuits, including Ford Motor, which shut down its autonomous venture in October 2022.

GM in early 2016 paid about $1 billion for Cruise, which was then a 40-person Silicon Valley startup. Within a few years, GM had attracted billions of dollars in outside investment from major companies, including Japan's SoftBank, Honda Motor and Microsoft.

GM maintained majority ownership and set up Cruise as an independent company at its San Francisco headquarters. By 2023, Cruise had begun a driverless ride-hailing service for paying customers in San Francisco. In October of that year, a hit-and-run driver in San Francisco struck a pedestrian, throwing her into the path of a driverless Cruise car. The car stopped and the woman became pinned underneath and was dragged 20 feet at a slow speed. California regulators said some Cruise officials misrepresented details of the incident and deemed the cars unsafe, prompting the company to suspend its fleet." [1]

1. GM Scraps Its Cruise Robotaxi Program, Cites Costs. Nakrosis, Stephen; Otts, Christopher.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Dec 2024: B.1.