General Motors discontinues funding for Cruise robotaxi development

General Motors has announced its decision to cease financial backing for the advancement of its Cruise self-driving taxi. The company stated its new focus would be to “refocus autonomous driving development on personal vehicles”. GM also cited the increasingly competitive robotaxi market as a contributing factor to this action. In October, Tesla CEO Elon Musk unveiled the electric car giant’s highly anticipated robotaxi, the Cybercab, at the Warner Bros Studios in Burbank, California. General Motors attributed its change in strategy to “the considerable time and resources that would be needed to scale the business”. The company did not disclose the number of Cruise employees who might be transferred to GM. General Motors, which holds approximately 90% ownership of Cruise, indicated that it has reached agreements with other shareholders to increase its stake to over 97%. In December 2023, Cruise announced plans to eliminate 900 jobs, representing about a quarter of its total workforce. Earlier, Cruise had withdrawn all its US vehicles from testing after California suspended its permit for driverless testing. In October 2023, one of its vehicles was involved in an incident where it struck a pedestrian and subsequently dragged her for more than 20ft (6m), resulting in serious injuries. Cruise admitted to submitting an inaccurate report to the National Highway Traffic Safety Administration regarding that crash, which led to the resolution of a criminal investigation last month. Federal prosecutors stated that Cruise employees failed to include a description of the pedestrian being dragged in their account provided the morning after the incident. Cruise co-founder Kyle Vogt departed from the company a few weeks later. On Tuesday, following GM’s announcement, Mr. Vogt posted on the social media platform X: “In case it was unclear before, it is clear now: GM are a bunch of dummies.” Mary Barra, the chief executive of the Detroit-based manufacturer, had previously projected that the Cruise operation had the potential to generate $50bn (£39bn) in annual revenue by the year 2030. Rival automotive manufacturing firms have also encountered challenges with projects aimed at building autonomous vehicles. In 2022, Ford and Volkswagen disclosed their decision to shut down Argo AI, their collaborative self-driving car venture. Concurrently, the nascent robotaxi sector has consistently attracted significant participants. Besides Tesla, other contenders in the development of self-driving cabs include Waymo, a subsidiary of Google’s parent company Alphabet, and the technology giant Amazon.