GM pays robotaxi subsidiary Cruise 850 million dollars and builds fewer e-cars
After an accident involving an autonomous cab triggered a crisis at Cruise, GM wants to help its robotaxi division back on its feet with a cash injection.
Test drive of an autonomous vehicle from GM subsidiary Cruise in San Francisco.
(Image: Daniel AJ Sokolov)
The US car manufacturer General Motors is supporting its robotaxi company Cruise with 850 million US dollars in order to gain time for strategic considerations regarding the future of Cruise. This was stated by GM manager Paul Jacobson at a conference organized by Deutsche Bank. He also admitted that the industry had been too optimistic about the sales opportunities for electric cars and had built too many electric cars.
With the financial aid, GM is almost completely reversing its decision from the beginning of 2024 to save around one billion euros at Cruise, which was significantly more than the "hundreds of millions" that CEO Mary Barra had spoken of in November 2023. In that year, Cruise had already made an operating loss of almost 3.5 billion dollars.
Expensive business interruption
The main reason for the poor figures was the loss of the Californian license due to alleged lack of cooperation with the traffic authority following an accident involving personal injury. At the beginning of October, a driverless Cruise car in San Francisco dragged a woman several meters. Even before that, there had been problems with emergency vehicles and rear-end collisions caused by sudden braking.
When the Cruise cab drove off at a green light, a woman entered the road and was pushed in front of the autonomous cab by another vehicle. Despite emergency braking, the woman was trapped under the vehicle. It then drove several more meters "to avoid further road safety problems", as Cruise initially said. The defensive attitude towards the authorities during the investigation led GM to replace a large part of the management and discontinue production of the "Origin" robotaxis. Together, this cost Cruise several billion dollars. Only now is Cruise starting to put its cars back on the road, initially in a single city.
Slightly fewer electric cars
Jacobson also reaffirmed GM's decision at the end of last year to build fewer electric cars in future than was actually possible and originally planned. The reason for this was unexpectedly weak demand for battery electric vehicles. Instead of the possible 300,000 or so electric cars, GM expects to produce only 200,000 to 250,000 units in 2024. The company does not want to be embarrassed by having to get rid of cars produced in stockpiles. At the end of 2023, a planned cooperation with Honda in the electric car sector had already failed to materialize due to this development, and GM has also postponed the start of production of its electric pickups Chevrolet Silverado EV and GMC Sierra EV from the end of 2024 to the end of 2025.
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(fpi)