General Motor’s funding to cruise is being cut

GM Will Stop Using Robot Axis in Evolving Autonomous Vehicle Production, A Comment on Chairman and Chief Financial Officer A.R. Barra

GM expects to achieve cost savings of $1 billion per year once it finishes acquiring the rest of the shares.

GM’s decision to scrap its robotaxi business comes after years of profligate spending in the hopes of creating a new mobility division that could bring in new revenues for the company. The automaker has invested approximately $10 billion in Cruise since first acquiring it in 2016, Barra said.

The Detroit automaker has poured a lot of money into creating a taxi service since it acquired Cruise in San Francisco. GM turned off the spigot.

It would get out of robotaxis because of the time and resources that would be needed to scale the business and an increasingly competitive market.

“Given the considerable time and expense required to scale a robotaxi business in an increasingly competitive market, combining forces would be more efficient and therefore consistent with our capital allocation priorities,” Barra said on the call.

GM may not have changed its name, but it still believes that people want a fully autonomously driven car on their own terms.

Eventually, cars with a level 4 will be sold to car buyers so they can drive completely autonomously on some roads. People love to drive their own cars, but not in every situation.

Cruise’s History of Development, Charged Self-Driving, and Inaccuracies with an Axion Automated Vehicle

General GM states that it owns 90 percent of Cruise and has an agreement to own more than 97 percent of the firm. GM will “restructure and refocus” Cruise as part of the effort, but Barra could not say whether the new arrangement would lead to layoffs.

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

In order to expand its service to other areas, the company has accelerated plans to include areas of San Francisco and Los Angeles. Last week it was announced that the company planned to start testing its cars in Miami next year, with plans to begin charging for rides in 2026.

Musk has said that his company plans to have self-piloted cars next year. He said robotaxis with steering wheels would be available in California and Texas in a few years.

The National Highway Traffic Safety Administration looked into the ability to see in low visibility conditions of Full Self-Driving and found doubts about whether the cars are ready to be deployed.

The move 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 venture in Pittsburgh that it co-owned with Volkswagen.

GM spent billions in the subsidiary and eventually bought most of the company from investors, who racked up millions in losses.

The 2023 Oct 7th, Loss of a Cruise Driver in San Francisco is a Testcase of Autonomous Autonomy

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.

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 omitted important details about the accident that it had struck a pedestrian. 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.

“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.

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 are not driving for a longer period, they may become more control in an emergency situation. They may be unable to respond correctly due to not paying attention. And those actions can create a domino effect that has the potential to be dangerous — perhaps even fatal.