In a surprise move, General Motors announced this week that it’s pulling the plug on its robotaxi business––making it the latest company to shift its focus from fully autonomous vehicles amid technological challenges and market pressures.
In a news release, the Detroit automaker said it would stop funding Cruise, the self-driving vehicle company it acquired in 2016 and into which it’s poured $10 billion. The company plans to combine the Cruise and GM autonomous driving teams, and in the coming months acquire the remaining shares of Cruise from other shareholders in order to wind down operations.
GM cited “the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.”
“I want to be clear that GM made this decision to refocus our strategy because we believe in the importance of driver assistance and autonomous driving technology in our vehicles,” CEO Mary Barra told Wall Street analysts. “This approach would allow us to leverage the strengths of GM and Cruise while simplifying and accelerating the path forward, providing customers meaningful benefits along the way.”
GM expects the move to save more than $1 billion a year.
Shifting focus: Executives said that GM will focus on advancing the capabilities of its advanced driver assistance system (ADAS), Super Cruise, which enables drivers to take their hands off the wheel. GM aims to get Super Cruise to a higher level of autonomy, and eventually offer fully autonomous personal vehicles.
GM isn’t the only automaker to determine that fully autonomous driving tech would require too much time and resources. In 2022, Ford shut down Argo AI, an AV tech startup in which it had an ownership stake, to focus on ADAS.
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Dan Ives, a senior equity analyst at Wedbush Securities, told Tech Brew that he expects legacy automakers to focus internally on ADAS and partner with other companies on higher levels of autonomy.
“GM needed to rip the Band-Aid off on the Cruise initiative, which is billions of dollars down the tube,” he said. “It’s at a time when Barra and GM are rationalizing their cost structure.”
Competition heats up: The decision to slam the door on Cruise is also a tacit acknowledgement of the growing competitive pressures in the robotaxi sector. Alphabet-owned Waymo, for example, has made significant advancements this year, including expanding its ride-hailing services in Los Angeles. And Tesla has spelled out plans to launch a robotaxi product of its own in 2026.
“I think Waymo’s success and Tesla’s success have caused GM to look in the mirror and recognize that this was going to be a money pit with Cruise,” Ives said.
It follows other recent moves GM has made to realign its business, including selling its stake in a joint-venture battery plant in Michigan and restructuring its struggling China business, Reuters reported.
Meanwhile, Cruise has been in the spotlight since last October, when one of its vehicles dragged and seriously injured a pedestrian who had been hit by another vehicle. The incident prompted massive fallout: Cruise temporarily grounded its entire fleet, the co-founders and other executives left the company, and the company paid a $500,000 fine as part of a deferred prosecution agreement with the Justice Department.
“It’s kind of been one nightmare after the other with Cruise,” Ives said, “and I think there was growing pressure from the Street to shut this down or rationalize it.”