Robotaxis: GM pulls the ripcord, stops cruise rides

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The self-driving cabs from GM subsidiary Cruise are disappearing from US roads again. GM is pulling the ripcord because it sees no future for its robotaxis. Their development would be too expensive and take too long, and the market in this sector is intensifying. Instead, the car manufacturer wants to concentrate on the further development of driver assistance systems for privately owned cars, "on a path to fully autonomous personal vehicles".

GM announced this decision on Tuesday. Institutional investors reacted with buy orders in after-hours trading, causing GM's share price to rise by more than two percent. However, the Group does not want the repositioning to be understood as a rejection of self-driving cars. GM is "fully committed to autonomous driving", but this should be done in a "disciplined and capital-efficient manner". GM has poured tens of billions into Cruise since 2016.

Development teams are being merged

Cruise is currently around 90 percent owned by GM, which now wants to take over the subsidiary completely. There are already contracts in place for the purchase of further shares, meaning that GM will soon own more than 97 percent. GM hopes to reach an agreement with the small remainder soon. If this is successful, Cruise will be restructured in the first half of 2025, which should save more than one billion US dollars a year.

GM would like to add the subsidiary's technical staff to its own development team. What will happen to the remaining 2,300 Cruise employees remains to be seen. The offices in San Francisco are to be at least partially retained – GM is more likely to find sought-after software specialists there than at its Detroit headquarters or on the opposite Canadian shore in Windsor.

Cruise was founded in 2013 and initially brought out retrofit kits for existing vehicles for limited self-driving functions on highways. From 2015, the company then worked on fully autonomous cars and received a Californian license for test drives on public roads in June of that year. GM acquired a majority stake the following year. Since then, Cruise has lost more than ten billion US dollars. In 2023 alone, Cruise posted an operating loss of almost 3.5 billion dollars; this year, GM wanted to reduce Cruise's losses by around one billion.

Chauffeurless rides were the beginning of the end

In August of the previous year , Cruise received approval in San Francisco to offer chauffeurless cab rides for a fee. What looked like a breakthrough soon turned out to be a disaster. After an accident with an emergency vehicle, the license was halved in the same month, and at the end of October the Californian authorities withdrew the operating permit completely. The reason for this was an accident in the Californian city in which a Cruise cab dragged a pedestrian, or more precisely the company's reaction to the accident.

Cruise submitted video from an onboard camera to the investigating agency – but apparently not all of the footage. It was only after the licensing authority learned of the existence of further recordings elsewhere and requested them that Cruise is said to have released them. It is said to show that the vehicle with the person already trapped drove on for several meters. The city's fire department had previously referred to numerous incidents in which the autonomous cabs had hindered first responders. These safety problems, combined with the inadequate openness of Cruises, prompted the authorities to revoke the operating license for commercial trips without a safety officer.

New start not sustainable

GM apologized and changed Cruise's management, but the project never really recovered from the setback. Although Cruise allowed its cars back on public roads from April, it was no longer in San Francisco. The earth was scorched there. Initially, Cruise drove in Phoenix, Arizona, to collect precise map material, but from June onwards, autonomous driving was resumed, always monitored by a human at the wheel. This is of course doubly expensive.

In June, GM gave Cruise another cash injection of 850 million dollars and saved on the construction of electric cars. The Cruise service area was to be gradually extended to neighboring communities in Phoenix, and the robotaxis were also on the road in Dallas and Houston.

However, the technical progress is likely to have fallen short of expectations, and perhaps also the mood among the authorities and the public. Now GM has had enough. VW and Ford buried their joint self-driving project Argo AI two years ago.

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