General Motors has announced it is exiting its loss-making Cruise robotaxi business, in a dramatic change of strategy as the firm rethinks its bets on autonomous vehicle technology. Years of heavy investment in Cruise–GM’s self-driving car unit, supposedly the future of transport thanks to autonomous vehicles–has apparently come to naught with this decision.
First named Cruise, founded in 2013 and then bought up in 2016 by GM, wanted ambitious plans for a fleet of robotaxis to operate inside significant U.S. cities. Despite initial optimism, giant bets, and high promises to turn a profit on each ride, the robotaxi service was plagued with huge losses in front of technological hurdles, regulatory setbacks, and cutthroat competition across autonomous spaces.
Financial Struggles and Strategic Shift
Despite pouring billions of dollars into Cruise, GM faced persistent losses as the company attempted to scale the technology and bring the robotaxi business to market. The decision to exit comes after a series of disappointing earnings reports for Cruise, which failed to deliver the level of profitability that GM had initially projected. Combined with the delays in fully adopting autonomous driving, high development costs brought a rethink to GM’s autonomous technology approach.
In a statement, GM’s CEO, Mary Barra, explained that this is the company’s decision due to the fact that the company needs to focus more on its core business and shift toward more immediate growth opportunities.
Future of Cruise and Autonomous Vehicles
The Cruise Robotaxi exit doesn’t mean GM has forgotten about autonomous technology entirely, though. Instead, it plans to pivot money into the development of electric vehicles-the clear near-term growth path for its business. This brings in a new focus on manufacturing electric and connected vehicles for the company, with an added effort toward other integrations that might be done concerning the feature of autonomy.
