/cdn.vox-cdn.com/uploads/chorus_asset/file/25415561/STK418_Autonomous_Vehicles_Cvirginia_C.jpg "The end of Cruise is the beginning of a risky new phase for autonomous vehicles")
Eight years and $10 billion later, GM has decided to pull the plug on its grand robotaxi experiment.
The automaker’s CEO, Mary Barra, made the surprise announcement late on Tuesday, arguing that a shared autonomous mobility service was never really in its “core business.” It was too expensive and had too many regulatory hurdles to overcome to make it a viable revenue stream. Instead, GM would pivot to “privately owned” driverless cars — because, after all, that’s what the people really wanted.
“Customers like to drive,” Barra said in a call with investors. “And there’s times they don’t like to drive.”
If some of this sounds familiar, Ford essentially made the same decision two years ago when it pulled its funding for Argo AI, the autonomous driving startup it had financed since 2017. It cited as one of its reasons a belief that partial autonomy — often described as Level 3 or Level 3-plus — will have more near-term payoffs.
Automakers are tapping out of the robotaxi business
Automakers are tapping out of the robotaxi business. With all the money being spent on electric vehicles, the auto industry has decided to cut its losses on autonomous mobility. Only one transformational, prohibitively expensive, once-in-a-generation shift at a time.
“I think this is more a recognition that autonomous vehicle technology is going to take a decade or more to provide driverless rides at a national scale,” said Phil Koopman, an AV expert from Carnegie Mellon University. “GM decided that they would rather make money selling private cars while waiting for the technology to mature than continue to invest billions of dollars standing up robotaxi businesses city by city.”
Turmoil behind the scenes
To be sure, there’s been a lot of technological progress. Not too long ago, Cruise had driverless cars ferrying passengers across San Francisco. The company even said it was on the cusp of winning government approval to deploy its steering wheel- and pedal-less Origin shuttles in a bid to move even more people.
But Cruise moved too aggressively, and it paid the price. The company had 5 million miles of real-world testing under its belt, but the embarrassing incidents were starting to pile up. Its driverless vehicles were blocking traffic or running into emergency vehicles in San Francisco. The city’s fire chief said that the vehicles were “not ready for prime time,” citing over six dozen incidents in which robotaxis interfered with fire trucks.
“GM decided that they would rather make money selling private cars while waiting for the technology to mature”
Behind the scenes, Cruise was also a mess. The company’s first CEO, Dan Ammann, was sacked after sparring with Barra over the future direction of the company. Barra thought GM should be using Cruise’s technology to power everything from luxury self-driving Cadillacs to commercial vans, according to Bloomberg. Ammann wanted to get the robotaxi service right before spreading resources to other parts of the company. He also wanted to take Cruise public so it could use its public stock to lure in top talent. Barra wanted to keep it in-house, so GM could eventually reap the rewards.
Meanwhile, Cruise was continuing to rack up huge losses. The robotaxi subsidiary lost a staggering $3.48 billion in 2023. Kyle Vogt, Cruise cofounder and Amman’s successor as CEO, was under mounting pressure to expand the service and bring in more money to help cover the losses. Plus, he was directly competing with Alphabet’s Waymo, which had more vehicles and seemingly better technology. And Google’s parent company was more willing to spend billions of dollars, without any near-term profits, to win the robotaxi race. With the screws tightening, Vogt publicly drew a line in the sand: Cruise would bring in over $1 billion in revenue by 2025.
Instead, Cruise never made it to the end of 2024.
Drag and drop
It all culminated in an incident on October 7th, 2023, when a Cruise vehicle in San Francisco struck and dragged a pedestrian over 20 feet, seriously injuring her. The victim was initially struck by a hit-and-run driver, which launched her into the path of the Cruise car.
Cruise disclosed to regulators that its vehicle had struck a pedestrian but omitted key details about the accident. As a result, the California DMV suspended the company’s permit to operate self-driving cars in the state, and the National Highway Traffic Safety Administration and the Securities and Exchange Commission launched separate investigations. Cruise later agreed to a $1.5 million penalty.
But more importantly, the incident damaged Cruise’s effort to win the public’s trust. San Francisco residents were already annoyed by the frequency with which the company’s cars were blocking their intersections and bumping into their emergency vehicles. Urbanists and supporters of car-free transportation were peeved at the suggestion that robot cars, and not fewer cars altogether, were what was needed to improve street safety. And regulators didn’t like being misled about a dangerous incident.
The incident damaged Cruise’s effort to win the public’s trust
But even in the aftermath of the pedestrian-dragging event, GM still stuck with Cruise. It wasn’t until the automaker realized it going to have to take a $5 billion hit on restructuring its business in China that Cruise was ultimately cut loose.
“Total ownership by a century old manufacturing giant controlled by stock buyback-seeking value investors was never going to be successful,” Ray Wert, former communications director at Cruise, said on Bluesky.
Ex-CEO Vogt was even more succinct: “In case it was unclear before, it is clear now: GM are a bunch of dummies.,” he wrote on X.
Photo by Kazuhiro Nogi / AFP via Getty Images
What’s next?
With Cruise out of the picture, Waymo is one of the only ones left aiming to prove that robotaxis can work in the real world. (Amazon’s Zoox and Hyundai’s Motional are also still in the game, albeit far behind Waymo.) Tesla is also pursuing its own robotaxi project, which it claims will launch in 2026.
Meanwhile, GM will tackle a new risky experiment: personally owned autonomous vehicles. GM knows how to sell cars to people, and the company already has a hands-free highway driving feature called Super Cruise. Why not just leverage Cruise’s fully autonomous technology to make Super Cruise even better?
GM may have scrapped its “Ultra Cruise” branding to develop a partially autonomous system that covers “95 percent” of driving scenarios, but it still thinks that people want a fully autonomous car of their own — on their own terms.
“I think the application of what the customer wants in a privately owned vehicle is very different,” Barra said on Tuesday. “But I also think… there’s a lot of commonality [with Cruise’s technology]. How it seamlessly moves back and forth, I think is something different in a personal autonomous vehicle.”
“I think the application of what the customer wants in a privately owned vehicle is very different”
Driver-assistance technologies, especially so-called Level 3 systems, carry their own risks. There have been studies that show that the handoff between a partially automated system and a human driver can be especially fraught.
When people have been disconnected from driving for a longer period of time, they may overreact when suddenly taking control in an emergency situation. They may overcorrect steering, brake too hard, or be unable to respond correctly because they haven’t been paying attention. And those actions can create a domino effect that has the potential to be dangerous — perhaps even fatal.
The safety implications are enormous, as are the liability concerns. GM may eventually decide that robotaxis aren’t such a bad bet after all.
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