news
11 Dec 2024
General Motors says it will move away from the robotaxi business and cease funding its money-losing Cruise autonomous vehicle division.
According to a press release issued Tuesday and subsequent conference call that included GM Chair and CEO Mary Barra, the Detroit automaker will instead focus on development of partially automated driver-assist systems like its Super Cruise, which allows drivers to take their hands off the steering wheel.
GM said it would get out of robotaxis "given 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 work on advanced systems to assist drivers.
"The Cruise Board of Directors and the Cruise leadership team are collaborating closely with GM on next steps," Cruise CEO Marc Whitten told CBS News.
GM bought then San Francisco-based start-up Cruise Automation in 2016 for at least $1 billion with high hopes of developing a profitable fleet of robotaxis. At the time, Cruise Automation, along with Google, was among the few companies with permits from the state of California to test the cars.
Over the years GM invested billions in the subsidiary and eventually bought 90% of the company from investors.
GM even announced plans for Cruise to generate $1 billion in annual revenue by 2025, but it scaled back spending on the company after one of its autonomous Chevrolet Bolts dragged a pedestrian on a San Francisco street who was hit by another vehicle in 2023.
The California Public Utilities Commission alleged the company covered up details of the crash and suspended Cruise's driverless testing permit. Soon afterwards, Cruise pulled all its driverless cars off the road nationwide.
The incident sparked widespread criticism of the company and its autonomous vehicles. Cruise had already been under fire for a number of collisions that led the company to cut its operating robotaxi fleet in during the summer of 2023.
The problems triggered a purge of its leadership — in addition to layoffs that jettisoned about a quarter of its workforce.
In January of this year, the company offered to pay $75,000 to settle the investigation by California state regulators into Cruise's failure to disclose details regarding the collision.
Despite its troubles, Cruise was still attempting to return to viability. In June, General Motors named Marc Whitten -- one of the key engineers behind the Xbox video game console -- as the division's new chief executive. In August, Cruise announced its robotaxis would join Uber's ride-hailing service in 2025 as part of a multiyear partnership bringing together two companies that once appeared poised to compete for passengers.
However, more recent Cruise developments have been costly for GM. In September, National Highway Traffic Safety Administration officials announced the division would pay a $1.5 million penalty as part of a consent order. Last month, Cruise agreed to an additional $500,000 fine after admitting to filing a false report following the San Francisco pedestrian crash.
According to a statement from the U.S. Attorney's office of the Northern District of California, the San Francisco-based company entered into a deferred prosecution agreement in which Cruise admits and accepts responsibility.
"Companies with self-driving cars that seek to share our roads and crosswalks must be fully truthful in their reports to their regulators," said Martha Boersch, Chief of the Office of the U.S. Attorney's Criminal Division, said in a statement.