General Motors pulls plug on robotaxi business
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General Motors halts funding for Cruise self-driving taxis, refocusing on autonomous personal vehicles amid growing competition and setbacks. Photo: David Paul Morris/Bloomberg via Getty Images
General Motors (GM) has decided to halt funding for its Cruise self-driving taxi initiative, opting instead to “refocus autonomous driving development on personal vehicles.” The company cited several factors for the shift in strategy, including the increasingly competitive nature of the robotaxi market and the significant time and resources required to scale such a business effectively.
The decision comes amid heightened competition in the autonomous vehicle sector, especially after Tesla’s CEO, Elon Musk, introduced the long-awaited Cybercab robotaxi in October 2023. The unveiling took place at Warner Bros Studios in Burbank, California, adding further pressure on GM’s ambitions within the self-driving taxi space. GM acknowledged that its previous direction would have demanded substantial investment in both time and money, prompting the company to reevaluate its priorities and refocus on personal autonomous vehicles instead of pursuing a robotaxi business.
GM’s Cruise division has been a central part of its push into the autonomous driving market. However, the company’s change in strategy has resulted in significant workforce reductions. In December 2023, Cruise announced it would be laying off 900 employees, nearly a quarter of its total workforce. While GM did not provide specific details on how many Cruise employees might be reassigned to other GM operations, it did indicate that its stake in Cruise would increase to more than 97% through agreements with other shareholders, giving GM more control over the subsidiary.
The news also follows a series of setbacks for Cruise, including a suspension of its self-driving vehicle testing in California. In 2023, the state revoked Cruise’s permit to test autonomous vehicles after one of its cars struck a pedestrian in October. The incident resulted in the pedestrian being dragged for more than 20 feet, leaving her seriously injured. Following the crash, Cruise admitted to submitting inaccurate information to the National Highway Traffic Safety Administration (NHTSA) about the event, leading to a criminal investigation. Federal prosecutors revealed that Cruise had failed to include a key detail in their initial report—the description of the pedestrian being dragged. This led to significant scrutiny and, ultimately, to the resignation of Cruise co-founder Kyle Vogt in the weeks following the incident.
The timing of GM’s announcement also aligns with ongoing challenges faced by other companies in the autonomous driving space. In 2022, Ford and Volkswagen jointly shut down their self-driving car venture, Argo AI, after failing to make significant progress in the competitive market. These struggles are indicative of the difficulties companies face as they attempt to develop fully autonomous vehicles that are safe, reliable, and commercially viable.
Tesla, which remains a dominant player in the electric vehicle market, has also made strides with its own self-driving taxi initiative. However, the broader robotaxi industry faces challenges beyond just technical hurdles. Regulatory issues, public safety concerns, and the need for substantial investments have made it difficult for any company to establish dominance in the space.
In addition to Tesla, other major companies have entered the race to develop autonomous cabs. Waymo, a subsidiary of Alphabet (Google’s parent company), and Amazon are among the key competitors. Both companies have invested heavily in autonomous driving technologies, hoping to tap into what could be a multibillion-dollar industry in the future. However, the reality of delivering safe and functional autonomous taxis remains elusive for all involved.
This recent shift by GM underscores the growing realization within the automotive industry that the path to creating self-driving taxis is fraught with obstacles, from regulatory roadblocks to technological limitations and intense competition. Despite the setback with Cruise, GM is not abandoning its focus on autonomous vehicles altogether. Instead, it is pivoting toward developing self-driving technologies for personal vehicles, an area where the company believes it can have more control and a greater chance of success.
For GM, the road ahead may be less about competing with Tesla and other companies in the robotaxi space and more about focusing on personal vehicles with autonomous capabilities. The ultimate goal for GM remains clear: to be a leader in the future of transportation, but the path to that future may look quite different than what was originally envisioned. Whether other companies, including Tesla and Waymo, will succeed in creating truly autonomous taxis remains to be seen, but for now, GM is choosing to shift gears in its approach.
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