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GM Shifts Strategy, Halting Cruise Robotaxi Development
General Motors (GM) has announced a significant shift in its approach to autonomous vehicles by discontinuing the development of its Cruise robotaxi service. This decision comes after years of investment and mounting challenges in the highly competitive robotaxi sector.
Effective immediately, GM will no longer provide financial support for Cruise’s robotaxi initiative. Instead, the automaker intends to merge Cruise’s operations with its own technical team, aiming to enhance their focus on both autonomous and driver-assisted technology.
Following discussions with other investors, GM has agreed to increase its ownership of Cruise from 90% to over 97%. This restructure is projected to decrease GM’s annual expenses by more than $1 billion upon completion in the first half of next year.
Mary Barra, GM’s CEO, articulated the rationale behind this decisive move during a media call, stating, “This decision allows us to refocus our strategy, emphasizing the importance of driver assistance and autonomous driving technology within our vehicles.”
GM’s journey with Cruise began in 2016 when it acquired the self-driving startup for $1 billion, signaling its ambitious plans for a robotaxi service akin to Uber that would utilize driverless vehicles for passenger transport. This venture attracted significant contributions from influential investors, such as SoftBank and Microsoft, showcasing the high hopes placed on the robotaxi market.
Challenges Impacting Cruise
Despite initial optimism, the path has been fraught with difficulties. Cruise faced intense scrutiny from regulators last year following a series of safety incidents involving its autonomous vehicles.
Notable incidents included an empty Cruise AV becoming immobilized in wet concrete at a construction zone in August 2023 and a robotaxi obstructing emergency responders during a critical incident. Additionally, the company faced legal ramifications for submitting misleading information during a government investigation into a crash, which resulted in a $500,000 fine.
Further compounding its troubles, Cruise lost its operational permit in California after a pedestrian was reportedly dragged under one of its vehicles. Following this incident, the company halted testing in various states and conducted significant layoffs, affecting approximately 24% of its workforce, totaling around 900 employees.
Kyle Vogt, Cruise’s cofounder and former CEO, criticized GM’s decision to abandon the robotaxi focus. He expressed his frustrations on social media, stating, “In case it was unclear before, it is clear now: GM are a bunch of dummies.” Vogt’s resignation came after increased pressure from GM and the Cruise board regarding his leadership, which included hiring a third-party expert to evaluate safety protocols and appointing GM’s general counsel to oversee operations.
Rising Competition in the Robotaxi Space
The autonomous vehicle market is becoming increasingly crowded, with competitors such as Amazon-backed Zoox, Waymo, and Tesla emerging as major players. In October, Tesla unveiled its own robotaxi, the Cybercab, amid much anticipation.
Vogt commented on the obstacles Tesla may encounter in achieving its objectives, emphasizing that creating a reliable and compliant robotaxi network requires substantial effort and integration into local communities.
Waymo has gained a significant advantage over its rivals, having made substantial progress in launching robotaxi services to the public. As of October, the company reported providing over 100,000 paid rides weekly across locations such as San Francisco, Los Angeles, and Phoenix.
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