GM’s Cruise Exit Draws Sharp Reaction From Co-Founder Kyle V…

General Motors GM said on Tuesday that it will no longer fund Cruise‘s robotaxi development but will instead combine the majority-owned unit into its technical teams, to the annoyance of Cruise co-founder Kyle Vogt.

What Happened: The robotaxi development work needs considerable time and resources to scale, GM reasoned, while adding that the robotaxi market is getting increasingly competitive

“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.”

GM will now focus on developing its driver assistance technology called Super Cruise which requires active driver supervision, the company said.

Industry Leaders React: “Achieving a general solution to autonomy is a very hard problem, especially doing so without making the car super expensive,” Tesla CEO Elon Musk said about GM’s decision. Tesla is aiming to enable autonomous driving with future versions of its full self-driving (FSD) driver assistance software.

“In case it was unclear before, it is clear now: GM are a bunch of dummies,” Kyle Vogt, co-founder of Cruise and former CEO, said in a post on social media platform X. Vogt left the company after the involvement of one of Cruise’s robotaxis in an accident in San Francisco in October 2023.

Timeline: Cruise, until the accident, was a major robotaxi player in the U.S. in the leagues of Alphabet Inc’.s Waymo. However, the accident led to increased regulatory scrutiny and the company subsequently suspended all of its operations in the U.S.

The company resumed driving its robotaxis with a human driver in the city of Phoenix to gather road information earlier this year in April and in Houston and Dallas, Texas in June.

In July, the company also said that it is abandoning its plans to build the Origin autonomous vehicle and instead focussing on using its next-generation Chevrolet Bolt for autonomous driving operations, citing costs and the “regulatory uncertainty” around the Origin pedal-less vehicle.

However, hopes re-emerged briefly when Barra said in October that Cruise is looking to return to operating driverless vehicles by the end of the year.

Why It Matters: GM currently owns about 90% of Cruise. The company said on Tuesday that it has plans with other shareholders of the company to raise this to 97% by acquiring shares.

Following the process, the company said it would work with Cruise to restructure its operations, provided it receives Cruise’s board approval. The automaker expects the restructuring to lower costs by more than $1 billion annually once completed, which is expected to be done in the first half of 2025.

Cruise posted an operating loss of $2.067 billion in the nine months through the end of September. The parent company also spent $583 million on restructuring Cruise this year.

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Photo courtesy: GM