The Detroit-based firm announced the cessation of financial backing for autonomous robotaxi initiatives, citing the substantial time and resource commitment necessary for operational scaling, and the intensifying competition within the robotaxi market.
Since 2016, GM has invested over $10 billion in Cruise, which will now be integrated into its team focused on driver assistance technologies.
This decision follows GM's recent reductions in electric vehicle plans, the sale of its stake in a joint venture battery facility, and a restructuring of its operations in China, indicating a shift towards its more profitable gasoline-powered pickup trucks and larger vehicles.
Following the announcement, GM's stock rose by 3.2% in after-hours trading on Tuesday.
Earlier in 2023, GM CEO Mary Barra projected that the Cruise division could achieve $50 billion in annual revenue by 2030, but she indicated on Tuesday that the division is now considered non-essential.
"You need to fully grasp the costs associated with operating a robotaxi fleet, which are quite substantial, and this is not our primary business," Barra remarked during an analyst call.
GM anticipates that the restructuring will reduce expenditures from approximately $2 billion to $1 billion once the plan is finalized by the end of June.
Barra did not specify how many employees from Cruise might transition to other roles within GM.
Competitors in the emerging robotaxi market include well-funded companies like Alphabet's Waymo, Baidu, and Tesla.
However, some of GM's rivals have already halted investments in autonomous driving ventures, citing the high costs and challenges associated with developing such advanced technologies.
In October 2022, Ford Motor Company initiated the process of shutting down its Argo AI division, which had received partial funding from Volkswagen. The company continues to develop advanced driver assistance systems internally, distinct from the fully autonomous technologies that were previously under development at Argo AI.
Meanwhile, Tesla's CEO Elon Musk, who is a close advisor to President-elect Donald Trump, remains optimistic about the prospects of robotaxis. It is anticipated that Trump will facilitate the nationwide deployment of self-driving vehicles.
Recently, Waymo announced its plans to extend its autonomous ride-hailing services to Miami. Last month, the company made its ride-hailing services available to the general public in Los Angeles and successfully completed a $5.6 billion funding round led by Alphabet in October.
Additionally, Cruise acknowledged that it submitted a misleading report to sway a federal investigation and has agreed to pay a $500,000 criminal fine as part of a deferred prosecution agreement.
The Justice Department revealed that Cruise did not disclose critical information regarding an October 2023 incident in which one of its robotaxis in San Francisco collided with and seriously injured a pedestrian. General Motors (GM) has since settled a significant claim with the injured individual and is under ongoing scrutiny from U.S. auto safety regulators.
In July, General Motors announced the termination of its autonomous vehicle program lacking traditional human controls, a decision following the extensive restructuring implemented in response to the 2023 accident. This restructuring included executive dismissals and workforce reductions exceeding twenty-five percent.
In 2022, General Motors petitioned the National Highway Traffic Safety Administration for authorization to deploy up to 2,500 Origin autonomous vehicles annually, lacking conventional driver controls. However, sources indicate that General Motors has since withdrawn this petition.