GM Abandons Robotaxi Development at Cruise

General Motors (GM) announced on Tuesday that it is ceasing development of robotaxis at its Cruise subsidiary, marking a significant setback for the automaker's autonomous vehicle ambitions, reports Reuters. The decision, attributed to the substantial time and resources required to scale the business and the increasing competitiveness of the robotaxi market, reflects a strategic shift toward GM's core profitable businesses.

GM has invested over $10 billion in Cruise since 2016. The Cruise unit will now be integrated into GM's advanced driver assistance systems group, shifting its focus from fully autonomous vehicles to driver-assistance technologies.

This move follows GM's recent streamlining efforts, including scaling back electric vehicle plans, divesting from a battery plant joint venture, and restructuring its China operations. The company is now prioritizing its profitable segments, namely the production of gasoline-powered pickup trucks and other large vehicles.

GM's decision to abandon Cruise's robotaxi development comes despite previous ambitious projections. In 2023, GM CEO Mary Barra predicted that Cruise could generate $50 billion in annual revenue by 2030. However, Barra now views the robotaxi business as non-core and expendable.

"You've got to really understand the cost of running a robotaxi fleet, which is fairly significant, and again, not our core business," Barra stated on an analyst call.

GM anticipates that the restructuring will reduce spending from approximately $2 billion to $1 billion by the end of June 2025. The company has not yet disclosed the number of Cruise employees who will transition to GM.

GM's exit from robotaxi development contrasts with the continued investments in this sector by other major players, including Alphabet's Waymo, Baidu, and Tesla. However, some competitors have already scaled back their autonomous driving initiatives, citing the high costs and technological challenges involved.

Ford Motor, for instance, began winding down its Argo AI operation in October 2022. Despite this, Tesla CEO Elon Musk remains optimistic about the future of robotaxis, and President-elect Donald Trump is expected to facilitate the broader deployment of self-driving vehicles.

Cruise recently admitted to submitting a false report to federal regulators, resulting in a $500,000 fine as part of a deferred prosecution agreement. The Justice Department cited Cruise's failure to disclose key details of an October 2023 crash in San Francisco that seriously injured a pedestrian. This incident led to significant changes within Cruise, including executive departures and employee layoffs. GM had also sought permission to deploy thousands of driverless vehicles annually, but recently withdrew its petition to the National Highway Traffic Safety Administration.