General Motors Writes-Off $5bn On Robot Taxis

General Motors (GM) has recently said it will end it 'robotaxi' autonomous vehicle development at its loss-making Cruise business, which has proven to be an insoluble technology problem for the giant car manufacturer.  

GM said “given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market” its too much. 

GM will now prioritise developing Super Cruise, its advanced driver assistance system for personal vehicles, and Cruise will be folded into its group working on driver assistance technology. 

The development marks a significant change for GM, which has invested more than $10bn in Cruise since 2016. Last year, Mary Barra, the GM CEO predicted that the Cruise business could generate $50bn in annual revenue by 2030. This year, however, Barra told market analysts, “You’ve got to really understand the cost of running a robotaxi fleet, which is fairly significant, and again, not our core business.” 

The founder and former CEO of Cruise and proponent of self-driving technology, Kyle Vogt, expressed frustration,. “In case it was unclear before, it is clear now: GM are a bunch of dummies,”  he posted on X.

GM’s decision comes as it has scaled back plans for electric vehicles, selling its stake in one of its joint venture battery plants and restructuring its Chinese business operations to focus on its established petrol and diesel fuelled business making trucks and other large vehicles.

  • In a similar move, Ford Motor has scaled down its commitment to the Argo self-driving business, a joint venture with Volkswagen.
  • Uber and Lyft also invested heavily in driverless car technology systems which they have since been closed.

These development demonstrate the long-term commitment and  high levels of investment  required to develop self-driving vehicles. After GM, Ford, Uber and Lyft's withdrawal, those still standing include  Alphabet’s Waymo, (the only company that is presently capable of running paid, autonomous taxis in the US) and Elon Musk's Tesla.

  • Waymo plans to expand its autonomous ride-hailing services and recently opened its ride-hailing services across  in Los Angeles, and has succeeded in raising a further $5.6bn funding led by its parent company, Alphabet. 
  • Amazon is reported to be testing a vehicle that has no manual driver controls, while Chinese companies, including Baidu’s Apollo and WeRide, are also testing autonomous vehicles. 

Having consumed $10bn, Cruise has remained a money-losing enterprise and ​​​​GM expects to significantly cut spending after the restructuring plan is completed.

Cruise's progress was undermined by an  incident in San Francisco when one of its self-driving vehicles left a pedestrian badly injured, resulting in a recall of its fleet of vehicles and faced state and subsequent investigations and fines imposed  the US Dept. of Justice, which led to the resignation of Vogt, then CEO. 

@kvogt   |   GM   |   Guardian   |    Cruise   |   NYTimes   |    Reuters   |    TopGear  |   Design News   |   

US Dep. of Justice 

Image: @Cruise

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