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Cruise Robotaxi Service Is Dead As GM Pivots
After a staggering USD10 billion investment, General Motors is officially hitting the brakes on Cruise robotaxi service.
The automaker's once-ambitious foray into the world of robotaxis has caused the automaker more than a few headaches - both financial and legal. And at a time when GM is more mindful of costs than ever, Cruise will be one of the first branches CEO Mary Barra lops off to save the tree.
Cruise was investigated for keeping key details of a crash on Oct 2023 from investigators, regulators, and the media. A pedestrian was struck by a Cruise vehicle after she was struck by a human-operated Nissan and thrown into its path. The accident led to the suspension of its driverless operations.
Tesla bulls said that with the exit of Cruise, this will benefit Tesla. But this is not really so because Cruise is a distant second to Waymo in robotaxi and its market share is not large. Running a robotaxi operation is also expensive, although Tesla has better cost control than Cruise. But this serves as a reminder to Tesla that its robotaxi licence, which it may get through lax regulaions, may be suspended if there is any accident.
"The amount of money to deploy a robotaxi business and then to maintain that business and grow it, it's quite a bit of capital," said CEO Mary Barra during a media call. "A robotaxi business is not General Motors' core business."
Instead, Barra said, GM's automated driving efforts will focus on the consumer side of things, meaning increasingly automated and driverless cars instead of a robotaxi service.
Cruise's plans to roll out robotaxis nationwide might be over, but its technology and talent won't go to waste. GM says that it plans to roll Cruise's advances into what it's calling "Personal Autonomy" - the kind that you or I have access to in our personal vehicles. Think of a more advanced version of GM's Super Cruise with the final technical destination being Level 3 and Level 4 autonomy.
Sure, that's not the same thing as hopping in the back seat of a Cruise-branded Chevy Bolt and being chauffeured completely autonomously, but GM says that's not what folks want all of the time, anyway: they want to drive themselves.
"We know people everywhere love to drive their own vehicles, but not in every situation," Barra said. She later continued: "The opportunity to deliver these benefits to our customers that they'll use every day is very exciting for us, and that is our core business," said Barra.
GM openly cited increased competition as a hurdle in the robotaxi market. And while GM is right - there are a lot of players on the court, like Waymo, Zoox, and allegedly, Tesla soon - Cruise was one of the big ones, recent problems aside.
But those problems did not help Cruise's chances in the marketplace. The service shut down in Oct 2023 after a series of collisions with pedestrians, which led to the California DMV's suspension of its autonomous taxi operations. Its founding CEO Kyle Vogt resigned soon afterward (and later directed a good deal of ire at GM for how it handles new technology) and the future of the Cruise Origin shuttle was left more in doubt than ever. While Cruise resumed operations with a small fleet of human-driven vehicles in a few cities, it never quite recovered from these setbacks. And then GM, facing a USD5 billion loss from restructuring its China operations, decided to save money by pulling the plug entirely.
It's a hard truth to swallow: the race to autonomy is expensive. It's also proving to be harder than the brand expected For GM to abandon Cruise now could be a sign that GM simply doesn't see Level 5 autonomy as achievable in the near future (especially since Barra specifically referenced Levels 3 and 4 as the tech it plans to port over from Cruise), or that the brand is simply unwilling to sink even more money into its autonomous driving efforts when billions could be spent better elsewhere.
Barra says that GM and Cruise haven't worked out the details just yet. GM does intend to purchase the remaining shares of Cruise which would enable it to roll the AV company's tech and talent into its internal ecosystem, however, that's still a big to be decided. The automaker plans to work with Cruise's board to see what a transition plan could look like moving forward and expects to share more with the public later this year.
Maybe the better question to ponder is whether or not the robotaxi narrative was overhyped from the get-go. Sure, Cruise's innovations will live on in GM's future products - in the same sense as brands developing racing tech for Formula One and then technically stuffing it into its road cars. But this major retreat is a true taste of reality for the AV industry.
And if GM needs more financial security, maybe grounding its autonomy dreams is the right path to take.
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