GM withdraws Cruise robot after investing more than $10 billion in the business it runs itself

General Motors said Tuesday it will stop funding and exit robotaxi development at its majority-owned Cruise business, a blow to the automaker that had made the high-tech unit a top priority.

GM said it will no longer fund the robotaxi work “given the significant time and resources that would be required to expand the business, along with an increasingly competitive robotaxi market.” The automaker has invested more than $10 billion in Cruise.

GM shares rose 3.2% in extended trading on Tuesday.

In 2023, GM CEO Mary Barra said the Cruise business could generate $50 billion in annual revenue by 2030.

“This is the latest in a series of decisions that GM has announced that underscore our focus on having the right technology for the future of our company and our industry and reflect our commitment to execute quickly and efficiently,” she said. on tuesday.

Barra declined to say how many Cruise employees might be transferred to GM.

Some of GM’s competitors have already stopped funding autonomous driving businesses, citing the costs and difficulties involved in developing such sophisticated technology. In October 2022, Ford Motor shifted spending from its Argo AI operation, shutting down the venture that was also funded by Volkswagen.

Ford is still working on advanced in-home driver assistance systems other than the fully autonomous ones being developed at Argo AI.

Last month, Cruise admitted to filing a false report to influence a federal investigation and agreed to pay a $500,000 criminal fine as part of a deferred prosecution agreement. The Justice Department said Cruise failed to disclose key details of an October 2023 crash to federal regulators in which one of his robotaxis in San Francisco struck and seriously injured a pedestrian.

GM expects the restructuring to cut costs by more than $1 billion a year after the plan is completed by the end of June.

GM, which owns about 90% of Cruise, has agreements with other shareholders that will increase its ownership to more than 97% and will pursue the purchase of the remaining shares.

GM in July said it would halt development of a planned robotaxi that would not have a steering wheel or other human controls.

In 2022, GM filed a petition with the National Highway Traffic Safety Administration seeking permission to deploy up to 2,500 self-driving Origin vehicles each year without human controls such as brake pedals or mirrors. The agency did not act on the request, and GM cited regulatory risk for its decision.