Shifting Gears: Why Did GM Hit the Brakes on Robotaxis?

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Global (Commonwealth) _  The manufacturing process of the Cruise self-driving taxi will no longer get funds, according to General Motors.

According to the corporation, it will now concentrate its efforts on developing autonomous driving technology for personal automobiles. Moreover, GM cited the fiercely competitive robotaxi sector as justification for the change.


Elon Musk, the CEO of Tesla, debuted the Cybercab, the electric car giant’s much anticipated robotaxi, at Warner Bros. Studios in Burbank, California, in October.

GM justified the strategy shift by citing the significant time and financial investment required to scale the company. The firm did not disclose the number of Cruise employees that could potentially transfer to GM.

Through agreements with other shareholders, GM, currently holding over 90% of Cruise, plans to increase its shareholding to over 97%. Cruise said in December 2023 that it would lay off 900 employees, or roughly 25% of its workforce.

Prior to California suspending its driverless testing authorization, Cruise has withdrawn all of its US vehicles from testing. One of its cars struck a pedestrian in October 2023, gravely injuring her and dragging her over 20 feet (6 meters).

In a criminal investigation that concluded this month, Cruise admitted to providing the National Highway Traffic Safety Administration with false information about that collision.

Federal prosecutors claim that Cruise staff members neglected to describe the man they were pulling in their report. A few weeks later, Kyle Vogt, a co-founder of Cruise, departed the company.

Following GM’s Tuesday statement, Mr. Vogt posted on social media. If it wasn’t obvious before, it’s obvious now: GM is a bunch of fools.

Mary Barra, the CEO of the Detroit-based company, has previously estimated that by 2030, the Cruise division might bring in $50 billion (£39 billion) annually. Projects to create driverless vehicles have also proven difficult for rival automakers.

In 2022, Ford and Volkswagen announced the closure of their joint venture on self-driving cars, Argo AI. The nascent robotaxi market has long attracted major players.


Other companies that are competing with Tesla to develop self-driving taxis include Waymo, a division of Alphabet, the parent company of Google, and technology giant Amazon.

General Motors’ announcement on Tuesday that it would stop developing robotaxis at its majority-owned, financially struggling Cruise company dashed the aspirations of the largest U.S. automaker, which made the advanced technology division a main priority.

Given the significant time and money required to develop the business, as well as the increasingly competitive robotaxi sector, the Detroit-based automaker said that it would no longer fund work on self-driving robotaxis.


Since 2016, the carmaker has made over $10 billion in investments in Cruise. Its team working on driver assistance technology will include Cruise.

Following GM’s reduction of its electric car aspirations, sale of its interest in one of its joint venture battery operations, and reorganizing its operations in China, allowing the company to concentrate more on its lucrative line of producing large vehicles, including gasoline-powered pickup trucks. In Tuesday’s extended session, GM’s stock increased 3.2%.

Mary Barra, the CEO of General Motors, stated in 2023 that the Cruise division might bring in $50 billion a year by 2030, but she later stated on Tuesday that the division was expendable.

During an investor call, Barra stated, “You really have to understand the cost of running a robotaxi fleet, which is fairly significant and again, not our core business.”

GM expects the restructure to reduce spending from roughly $2 billion to $1 billion by the end of June.

Detroit is home to the headquarters of the American multinational automaker General Motors Company (GM). The corporation is most known for owning and producing four car brands, each of which is a distinct subsidiary of General Motors: Cadillac, Buick, GMC, and Chevrolet. Prior to losing the top rank to Toyota in 2008, it was the biggest carmaker in the world for 77 years and the largest in the US by total sales.

General Motors has production facilities in eight different countries. Through SAIC-GM-Wuling Automobile, GM owns stakes in the Chinese brands Baojun and Wuling in addition to its four main brands.

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