General Motors announced Tuesday it would stop funding its majority-owned cruise business and withdraw from robotaxi development, a blow to the automaker that had made advanced technology a top priority.
GM said it would no longer provide funding for the robotaxi business, “given the increasingly competitive robotaxi market and the significant time and resources required to expand the business.” Automakers have invested more than $10 billion in Cruise.
GM stock rose 3.2% in extended trading Tuesday.
GM CEO Mary Barra said in 2023 that the cruise business could generate $50 billion in annual revenue by 2030.
“This is the latest in a series of decisions GM has announced, emphasizing our focus on deploying the right technology for the future of our company and our industry, and moving quickly and rapidly,” he said Tuesday. “It reflects our commitment to execute efficiently.”
Barra declined to say how many Cruise employees might be transferred to GM.
Some of GM's competitors have already stopped funding self-driving projects, citing the cost and difficulty of developing such advanced technology. In October 2022, Ford Motor Co. shifted spending away from the Argo AI business and ended the business, which also received funding from Volkswagen.
Ford is currently developing advanced driver-assistance systems in-house that are different from the fully self-driving system being developed at Argo AI.
Cruz last month admitted filing false reports to influence a federal investigation and agreed to pay a $500,000 criminal fine as part of a deferred prosecution agreement. The Justice Department said Cruise failed to disclose to federal regulators key details about an October 2023 crash in San Francisco in which one of its robotaxis struck and seriously injured a pedestrian.
GM expects the restructuring to reduce spending by more than $1 billion annually once the plan is completed by the end of June.
GM, which owns about 90% of Cruise's shares, has reached an agreement with other shareholders to raise its ownership to more than 97% and proceed with the acquisition of the remaining shares.
GM announced in July that it would halt development of its planned robotaxis, which do not have a steering wheel or human controls.
In 2022, GM has filed a petition with the National Highway Traffic Safety Administration seeking permission to deploy up to 2,500 self-driving origin cars a year, which lack human controls such as brake pedals and mirrors. The agency did not respond to the request, and GM cited regulatory risks in its decision.
