On Tuesday, General Motors (GM) announced that it would withdraw from the robotaxi business and halt funding for its Cruise autonomous vehicle unit, which has been operating at a loss. Instead, GM plans to develop driver-assist systems for personal vehicles, such as its Super Cruise, which allows drivers to take their hands off the wheel.
GM explained its decision by citing the significant time and resources required to scale the robotaxi business in the increasingly competitive market. The company will merge Cruise’s technical team with its own to concentrate on advanced driver-assistance technologies.
GM initially acquired control of Cruise in 2016, hoping to build a profitable robotaxi fleet. Over the years, GM invested billions into Cruise, eventually purchasing a 90% stake, but the subsidiary accumulated significant losses. By the time GM bought a controlling stake for $581 million, Cruise had accumulated over $10 billion in operating losses and generated less than $500 million in revenue, as reported in GM’s SEC filings.
The shift in strategy follows setbacks, including a 2023 incident where a Cruise autonomous vehicle was involved in a pedestrian accident. The California Public Utilities Commission suspended Cruise’s license to operate in the state after the company was accused of covering up details of the incident. This led to leadership changes and layoffs, affecting about a quarter of Cruise’s workforce.
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GM CEO Mary Barra emphasized that the company would now focus on enhancing its personal vehicle technologies and systems to drive autonomously under certain conditions. GM also plans to purchase the remaining 7% of Cruise and take full ownership of the company.
The decision reflects the broader challenges faced by the autonomous vehicle industry. Companies like Waymo and Tesla continue to expand their autonomous vehicle services, though progress remains slow and fraught with obstacles. GM’s restructuring of Cruise is expected to save over $1 billion annually, though it remains unclear how many employees will be affected by the changes.
