General Motors (GM.N) announced Tuesday it will cease funding its loss-making Cruise robotaxi unit, marking a strategic pivot for America’s largest automaker. The decision comes after years of heavy investment in autonomous technology.
GM, which has poured over $10 billion into Cruise since 2016, cited the substantial time and resources required to scale the business, coupled with rising competition in the robotaxi market. “This shift enables us to focus on more immediate and profitable opportunities,” said CEO Mary Barra during an analyst call.
Cruise will now merge with GM’s team developing driver-assistance technologies. The move follows other recent changes at GM, including scaling back electric vehicle (EV) plans and restructuring its China operations.
“We’ve learned the true cost of running a robotaxi fleet, and it’s significant,” Barra added. “This isn’t our core business.”
The restructuring is expected to reduce GM’s annual spending on Cruise from $2 billion to $1 billion by mid-2024. GM shares climbed 3.2% in extended trading following the announcement.
In a blow to its previous aspirations, GM had projected Cruise could generate $50 billion in annual revenue by 2030. Instead, the unit now faces a $500,000 fine for submitting a false report during a crash investigation.
The move underscores GM’s renewed commitment to its profitable gasoline-powered trucks and SUVs while continuing selective investments in EVs and advanced driver-assistance systems.
Read more on GM pauses development of its self-driving car indefinitely
