General Motors announced it will discontinue Cruise, its driverless ride-hailing service. The company plans to fold Cruise into its tech team and focus on developing autonomous driving for personal vehicles. “We see Cruise as an important step in our journey to build useful autonomous vehicles with practical applications,” GM CEO Mary Barra said in a statement.
“However, the increasingly competitive robotaxi market, our capital allocation priorities, and the considerable time and resources necessary to grow the business led us to this decision.”
GM has invested more than $10 billion in Cruise since acquiring the division in 2016. The move to abandon the robotaxi program is expected to save the automaker approximately $1 billion a year. Competition in the robotaxi space, particularly from Waymo owned by Alphabet, was cited as a key reason for GM’s shift in strategy.
Gm shifts focus to personal vehicles
Waymo has been operating its driverless ride-hailing service in Phoenix since 2020 and recently expanded to San Francisco. Analysts believe GM’s decision could be positive for other companies investing heavily in autonomous technologies, such as Tesla.
UBS analyst Patrick Hummel noted that GM’s move “underscores the challenges in scaling a robotaxi business” and could lead to “less competition and more consolidation” in the industry. GM’s stock rose 2.3% in extended trading following the announcement. The company said it will provide more details on its autonomous vehicle strategy during its upcoming investor day in September.
The decision to abandon Cruise comes as GM is focusing on its core business and investing in electric vehicles. The company plans to launch 30 new electric vehicles globally by 2025 and aims to phase out gasoline and diesel-powered vehicles by 2035.
