General Motors (GM) announced on Dec. 10 its decision to exit the robotaxi market after investing more than $10 billion in its Cruise autonomous vehicle unit.
GM said it will no longer fund Cruise development efforts due to “the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.”
The company said it will combine Cruise’s technical team with its own to advance autonomous and assisted driving. The automaker noted that it expects the restructuring will reduce its annual spending by more than $1 billion starting in the first half of 2025.
“GM is committed to delivering the best driving experiences to our customers in a disciplined and capital efficient manner,” GM CEO Mary Barra said in a statement.
GM acquired a controlling stake in Cruise automation for $581 million in 2016, in hopes of accelerating its development of autonomous vehicle technology. The automaker currently holds a 90 percent ownership stake.
The company said it has agreements with other stakeholders to raise its stake to more than 97 percent and buy the remaining shares in Cruise LLC.
“Contingent upon the repurchase of these shares and Cruise board approval, GM will work with the Cruise leadership team to restructure and refocus Cruise’s operations,” it stated.
GM reported a $435 million loss from its majority-owned Cruise robotaxi division in the third quarter of 2024, down from the $791 million loss in the same period last year.
The automaker previously announced plans for Cruise to generate $1 billion in annual revenue by 2025, but it scaled back its spending on the unit after one of its autonomous vehicles ran over a pedestrian who had been hit by another car in San Francisco on Oct. 2, 2023.
The Cruise vehicle failed to detect a pedestrian was underneath it and dragged her over 20 feet while trying to pull over to the side of the road, the U.S. Attorney’s office of the Northern District of California stated in a press release last month.
Prosecutors stated that Cruise filed a report with the National Highway Traffic Safety Administration describing the accident, but omitted reference to the secondary movement and dragging. Cruise eventually admitted to falsifying records and agreed to pay a $500,000 criminal fine.
The incident led to Cruise’s license to operate its driverless fleet in California being suspended by regulators and triggered a leadership shake-up and layoffs that reduced its workforce by about a quarter.
