The End of the Road for Cruise: GM Shifts Gears
General Motors is hitting the brakes: after pouring billions into its subsidiary Cruise, which specializes in autonomous taxis, the automaker has announced it will cease funding the project. The dream of deploying a fleet of driverless cabs was compelling but has turned out to be far more expensive and risky than anticipated. Mary Barra, CEO of GM, cited financial challenges and increasing market competition as reasons for the decision. Consequently, Cruise will now be folded into GM’s broader technical teams to focus on autonomous driving technologies for personal vehicles.
Thus, the vision of driverless GM taxis in the United States is over. Now, the focus will shift towards more feasible options like “Super Cruise,” a system already in use across several GM models, which manages highway driving under human supervision.
Microsoft Suffers a $800 Million Setback
In this collapse, GM’s partners have not emerged unscathed. Microsoft, which invested in Cruise in 2021 to promote its Azure cloud services and gain a foothold in the autonomous market, is now facing an $800 million loss. This loss has negatively impacted its financial results for the last quarter of 2024.
For Microsoft, this episode underscores the risks of betting on a technology still in its developmental stages. And for GM, the partnership was not enough to keep Cruise afloat.
Is the Robotaxi Market Already Overcrowded?
The competition in the autonomous vehicle market is fierce. Waymo, a subsidiary of Alphabet, continues to expand into cities like Miami and Atlanta, while Tesla is hyping up its “Cybercab”. Amazon (with Zoox) and Chinese firms like Pony.ai are also making significant strides. On the other hand, Cruise struggled with high-profile accidents and exorbitant operational costs. With over $10 billion spent and profitability still out of reach, GM decided to cut its losses.
A Risky Bet
By dropping its robotaxi venture, GM hopes to better leverage the technologies developed for Cruise and save a billion dollars annually. The big question for the coming years is whether consumers truly desire fully autonomous vehicles, or if they prefer to keep their hands on the wheel. In any case, Tesla and Waymo might be quietly celebrating, even though this turn of events raises questions about the viability of such business models.