General Motors (GM) said on December 10, 2024, that it would no longer fund the development of its Cruise division’s robotaxi business. The news comes after significant investments by the Detroit automaker into Cruise since its purchase in 2016, now totaling more than $10 billion. It mentioned a few reasons for this strategic turn: the increasingly competitive nature of the robotaxi market, the high capital and resources that must be put forth to scale the business, and the changing priorities for its operations as a whole.
Instead of pursuing its driverless ride-hailing focus, GM plans to refocus its autonomous driving efforts on advanced driver-assistance systems and autonomous technology for personal vehicles. The company will absorb Cruise, which remains a majority-owned subsidiary, into its broader technical teams. GM owns about 90% of Cruise and anticipates acquiring the remaining shares by early 2025, solidifying its control over the business.
The reorganization is expected to sharply cut GM’s investment in Cruise, which costs the company about $2 billion every year. According to Mary Barra, GM’s CEO, Cruise had progressed well toward developing a robotaxi service but the operational issues of a fleet were a challenge. She said the company will focus on other efforts under its broader mobility strategy.
The announcement comes at a challenging time for Cruise, which has experienced reverses in 2023, including the grounding of its driverless operations after a fatal pedestrian collision in October. The National Highway Traffic Safety Administration subsequently fined Cruise $1.5 million for its failure to report the accident. An internal GM-commissioned probe revealed leadership and cultural issues within Cruise that created the environment for regulatory oversights.
It also affects other stakeholders, including Honda. It had previously intended to roll out driverless ride-hail services in Japan by 2026, but it will now consider a shift in its strategy. Honda has so far invested around $852 million in Cruise. As GM shifts its focus elsewhere, others have moved ahead in the robotaxi market, including Waymo, Pony.ai, and Tesla. It is a milestone day in the history of autonomous vehicles, marking how hard it is to be ahead of the curve in this accelerating world of self-driving tech.
