GM to retreat from robotaxis and stop financing its Cruise autonomous vehicle unit

DETROIT — General Motors said Tuesday it will retreat from the robotaxi business and stop financing its money-losing Cruise autonomous vehicle unit.

Instead the Detroit automaker will focus on advancement of partially automated driver-assist systems for personal vehicles like its Super Cruise, which allows drivers to receive their hands off the steering wheel.

GM said it would get out of robotaxis “given the considerable period and resources that would be needed to scale the business, along with an increasingly competitive robotaxi economy.”

The business said it will merge Cruise’s technical throng with its own to work on advanced systems to assist drivers.

GM bought control of San Francisco-based Cruise automation in 2016 with high hopes of developing a profitable fleet of robotaxis.

Over the years GM invested billions in the subsidiary and eventually bought 90% of the business from investors, all while racking up millions in losses.

GM’s brushoff of Cruise represents a dramatic about-face from years of packed-blown back that left a huge budgetary dent in the automaker. The business invested $2.4 billion in Cruise only to sustain years of uninterrupted losses, with little in profit. Since GM bought a controlling stake in Cruise for $581 million in 2016, the robotaxi service piled up more than $10 billion in operating losses while bringing in less than $500 million in profits, according to GM shareholder reports filed with the financial instruments and swap percentage.

The automaker even announced plans for Cruise to generate $1 billion in annual profits by 2025, but it scaled back spending on the business after one of its autonomous Chevrolet Bolts dragged a San Francisco pedestrian who was hit by another vehicle in 2023.

The California community Utilities percentage alleged Cruise then covered up details of the crash for more than two weeks.

The embarrassing incident resulted in Cruise’s license to operate its driverless fleet in California being suspended by regulators and triggered a purge of its leadership — in addition to layoffs that jettisoned about a quarter of its workforce.

GM CEO Mary Barra told analysts on a conference call Tuesday the the recent unit will focus on personal vehicles and developing systems that can drive by themselves in sure circumstances.

The business has agreements to buy another 7% of Cruise and intends to buy the remaining shares so it owns the whole business.

The shift is another step back from autonomous vehicles, which have proved far harder to develop than companies once anticipated. Two years ago, crosstown rival Ford Motor Co. disbanded its Argo AI autonomous vehicle enterprise in Pittsburgh that it co-owned with Volkswagen.

At the period the business said it didn’t view a path to profitability for a number of years.

Yet other companies are pressing forward with plans to deploy autonomous vehicles and expanding their services.

Alphabet Inc.’s Waymo is accelerating plans to broaden its robotaxi service beyond areas of metropolitan Phoenix, San Francisco and Los Angeles. Last week the business said it would commence testing its driverless Jaguars in Miami next year, with plans to commence charging for rides in 2026.

The shift comes less than a month after Waymo opened up its robotaxi service to anyone looking for a ride in an 80-square-mile (129 square kilometer) area of Los Angeles. Waymo also has plans to launch fleets in Atlanta and Austin next year in partership with ride-hailing chief Uber.

In April, a business called Aurora innovation plans to commence hauling freight on Texas freeways using fully driverless semis.

Tesla CEO Elon Musk has said his business plans to have autonomous Models Y and 3 running without human drivers next year. Robotaxis without steering wheels using Tesla’s “packed Self-Driving” structure would be available in 2026 starting in California and Texas, he said.

But an investigation by the National Highway Traffic Safety Administration into packed Self-Driving’s ability to view in low visibility conditions cast question on whether Teslas are ready to be deployed without humans behind the wheel.

The agency began the investigation in October after getting reports of four crashes involving “packed Self-Driving” when Teslas encountered sun glare, fog and airborne dust. An Arizona pedestrian was killed in one of the crashes.

GM said it will work with Cruise’s leadership to restructure the business and refocus Cruise’s operations on driver assist systems. The business expects the restructuring to reduce spending by more than $1 billion annually.

Cruise has about 2,300 employees and will retain a presence in San Francisco, GM said. It’s too early to talk about employment levels until the restructuring is completed next year, a spokesman said.

Dave Richardson, elder vice president of software and services engineering, said Cruise will bring its software, artificial intelligence and sensor advancement to GM to throng up on improving GM’s driver-assist systems.

“We desire to borrowing what already has been done as we leave forward, and we ponder we can do that very effectively,” Barra said.

Shares of GM rose about 3% in market activity after Tuesday’s closing bell. They are up about 47% for the year.

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AP Technology Writer Michael Liedtke in San Francisco contributed to this update.