GM Exits Robotaxi Development at Cruise

By David Shepardson, Nora Eckert
(Reuters) – General Motors announced on Tuesday that it will cease funding and exit robotaxi development at its majority-owned unit, Cruise. This decision represents a significant setback for GM, which had placed high priority on the autonomous vehicle initiative.

GM stated that it would stop funding the robotaxi project due to the extensive time and resources required to scale the business, coupled with intense competition in the robotaxi market. The automaker has invested over $10 billion into Cruise thus far.

Following the announcement, GM shares increased by 3.2% during extended trading hours on Tuesday.

Earlier in 2023, GM CEO Mary Barra suggested the Cruise operation could potentially generate $50 billion in annual revenue by 2030. She described the decision as part of a series of moves to ensure the company focuses on the right technologies for its future, emphasizing speed and efficiency in execution.

When asked about potential employee relocations, Barra did not specify how many Cruise workers might transition to GM roles.

Some of GM’s competitors have similarly pulled funding from autonomous vehicle projects due to the high costs and complexities involved. For instance, in October 2022, Ford Motor Company redirected its investment away from the Argo AI project, which had also received funding from Volkswagen. However, Ford continues to develop advanced driver assistance systems that differ from the fully autonomous technologies pursued at Argo AI.

In a recent development, Cruise acknowledged submitting a misleading report during a federal investigation and agreed to pay a $500,000 fine as part of a deferred prosecution agreement. The Justice Department indicated that Cruise did not disclose vital details regarding a serious pedestrian accident involving one of its robotaxis in San Francisco in October 2023.

GM expects that the restructuring will lower annual spending by more than $1 billion once the initiative is completed by the end of June. Currently, GM owns approximately 90% of Cruise, with agreements that will increase its ownership to more than 97%, and plans to acquire the remaining shares.

In July, GM announced the cessation of its plans to develop a fully autonomous robotaxi devoid of a steering wheel or other human controls. In 2022, GM submitted a petition to the National Highway Traffic Safety Administration seeking approval to deploy up to 2,500 self-driving Origin vehicles per year without traditional human controls such as brake pedals or mirrors. The agency has yet to act on this request, and GM has cited regulatory risks as a factor in its decisions.