GM is giving up on Cruise robotaxis, pivots to personal autonomous vehicles

General Motors said Tuesday it will no longer fund the development of a commercial robotaxi business and will instead absorb its self-driving car subsidiary Cruise and combine it with the automaker’s own efforts to develop driver assistance features — and eventually fully autonomous personal vehicles.

The pivot is a remarkable step for the automaker, which acquired the self-driving startup Cruise in March 2016 for $1 billion. Since then, GM has poured billions into the company in a bid to commercial autonomous vehicle technology via a robotaxi business.

GM said in a statement that “the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market” were the reasons for the change. GM said it expects the restructuring to lower spending by more than $1 billion annually after the proposed plan is completed, which is expected in the first half of 2025. 

GM owns about 90% of Cruise. The company said it has agreements with other minority shareholders to buy back shares and raise its ownership to more than 97%. GM previously brought on a number of external investors including Microsoft, Walmart, Softbank, T.Rowe Price and Honda as the company sought to raise the billions in capital needed to bring robotaxis to the public. In 2022, GM expanded its stake in Cruise and acquired SoftBank Vision Fund 1’s equity ownership ifor $2.1 billion. At the time, GM also made an additional $1.35 billion investment in Cruise, replacing a previous commitment made by the fund in 2018.

The dramatic shift in strategy comes just one year after Cruise became embroiled in scandal, following an October 2 incident that left a pedestrian stuck under and then dragged by one of its robotaxis. That incident, and Cruise’s actions in the immediate aftermath, led to investigations, fines, firings, and GM taking more direct control over what was once a promising self-driving startup.

In the fallout, Cruise lost its commercial operating permits from California regulators, paused other testing in other states, laid off 900 employees — about 24% of it workforce — and shuttered plans to build a custom robotaxi called the Origin.