General Motors announced on Tuesday that it will halt the development of robotaxis at its majority-owned, financially struggling Cruise division, marking a significant setback for the largest U.S. automaker, which had previously prioritized the advanced technology unit. The Detroit-based company stated that it would no longer allocate funds for self-driving robotaxi projects, citing the substantial time, resources, and competitive landscape required to scale the business.
Since 2016, GM has invested over $10 billion in Cruise. The division will now be integrated into GM's group focused on driver assistance technology. This decision follows GM's recent adjustments in its electric vehicle strategy, including the sale of its stake in a joint venture battery plant and a restructuring of its China operations, allowing the company to concentrate on its profitable gasoline-powered pickup trucks and large vehicles.
GM's shares increased by 3.2% during extended trading on Tuesday. In 2023, CEO Mary Barra had projected that the Cruise business could generate $50 billion in annual revenue by 2030, but on Tuesday, she indicated that the business was no longer essential. Barra emphasized the high costs of operating a robotaxi fleet and reiterated that it was not GM's core business. The restructuring is expected to reduce spending from approximately $2 billion to $1 billion once completed by the end of June.
Despite the move, competitors like Alphabet's Waymo, Baidu, and Tesla remain active in the emerging robotaxi industry. However, some rivals have already halted funding for autonomous driving ventures due to the high costs and technical challenges involved. In October 2022, Ford Motor began winding down its Argo AI operation, which was partially funded by Volkswagen. Meanwhile, Tesla CEO Elon Musk remains optimistic about the future of robotaxis, and regulatory changes under President-elect Donald Trump could facilitate the deployment of self-driving vehicles nationwide.
Waymo recently announced plans to expand its autonomous ride-hailing services to Miami and opened its services to the public in Los Angeles last month. In October, Waymo secured a $5.6 billion funding round led by Alphabet. In a separate development, Cruise admitted to submitting a false report to influence a federal investigation and agreed to pay a $500,000 criminal fine. The Justice Department revealed that Cruise had failed to disclose critical details of a 2023 crash involving one of its robotaxis in San Francisco, which seriously injured a pedestrian. GM paid a substantial settlement to the injured woman and continues to face scrutiny from U.S. auto safety regulators.
In July, GM announced it would halt development of a planned robotaxi without a steering wheel or human controls, following a series of significant cuts, including the dismissal of top executives and layoffs affecting over a quarter of its workforce. In 2022, GM had filed a petition with the National Highway Traffic Safety Administration seeking permission to deploy up to 2,500 self-driving Origin vehicles annually without human controls, but recently withdrew the petition.
Source link: https://www.khaleejtimes.com
