Seeing no road to profit, GM shutters Cruise

GM decides to cut its losses, will focus on partial automation for passenger cars.

A Cruise vehicle on the streets of San Francisco. Credit: David Paul Morris/Bloomberg/Getty Images

After spending more than $10 billion to try to develop an autonomous robotaxi, General Motors is now calling time on the endeavor. On Tuesday afternoon, the automaker announced that it is done investing in Cruise's robotaxi development and will instead combine the startup's technical team with its internal efforts at GM.

After several years, GM has accepted the inevitable: Given the costs, there's no way to build a profitable robotaxi business. This year, GM will have spent around $2 billion on Cruise.

"GM is committed to delivering the best driving experiences to our customers in a disciplined and capital efficient manner," said Mary Barra, chair and CEO of GM. "Cruise has been an early innovator in autonomy, and the deeper integration of our teams, paired with GM’s strong brands, scale, and manufacturing strength, will help advance our vision for the future of transportation."

On a call with investors, Barra said that GM still "believe[s] in the importance of driver-assistance and autonomous driving technology in our vehicles."

GM bought into Cruise in 2016, when self-driving fever was at its peak. It had lofty goals of deploying robotaxis in a number of major US cities, and as early as 2019, it was lobbying the National Highway Traffic Safety Administration to be allowed to leave the steering wheel out of its test vehicles.

Cruise built its tech using a fleet of Chevrolet Bolts but had bigger plans for the Origin, a driverless pod purpose-designed for robotaxi work. But the Origin was laid to rest earlier this summer when GM killed the program in favor of Cruise continuing to use the Bolt.

Harder than it looked

The early timelines began to slide even before COVID, as the reality of trying to develop an autonomous car capable of handling a near-infinite number of edge cases began to bite. In 2017, one of the startup's robotaxi test cars hit a motorcyclist, but much more seriously, in 2023, a Cruise robotaxi dragged a pedestrian more than 20 feet after she was knocked into the autonomous vehicle's path by another vehicle.

That was sufficient for California to suspend Cruise's license to test driverless vehicles just three months after the state had approved its plan to charge customers for rides.

The prospects for the robotaxi industry seem bleaker than they did a few short years ago. In 2022, Ford and Volkswagen, which had each invested more than a billion dollars in Argo, realized there was no path to profitability and decided to reallocate their resources.

GM's decision will save it around a billion dollars a year, and instead of developing an entirely autonomous product, it will build on its Super Cruise technology to create a so-called "level 3" partially automated driving system similar to Mercedes-Benz's Drive Pilot. A level 3 assist allows drivers to take their eyes off the road when active and is intended for lower-speed conditions such as traffic jams.

But do customers actually want this tech? While beloved by investors, giddy with dollar signs in their eyes each time Tesla increases the price for its highly controversial Full Self Driving package, there is very little evidence the car-buying public has any such appetite. Not only is there no evidence that partial automation makes driving any safer, but hands-free driver assists also failed to even crack the top 10 desired features among new car buyers versus stuff they actually want, like wireless device charging or a panoramic glass roof.