General Motors Abruptly Pulls The Plug On Cruise

did the GM BoD just pull an Intel?

On December 10 2024, General Motors (GM) issued a press release announcing that it would no longer continue to fund its autonomous driving (AD) division, Cruise.

DETROIT – General Motors (NYSE: GM) plans to realign its autonomous driving strategy and prioritize development of advanced driver assistance systems on a path to fully autonomous personal vehicles. GM will build on the progress of Super Cruise, the company’s hands-off, eyes-on driving feature, now offered on more than 20 GM vehicle models and currently logging over 10 million miles per month.

The press release is masterfully written. If you stopped after reading the first paragraph, you might conclude that things were actually going quite well for their AD technology. That is, until you read the second paragraph:

GM intends to combine the majority-owned Cruise LLC and GM technical teams into a single effort to advance autonomous and assisted driving. Consistent with GM’s capital allocation priorities, GM will no longer fund Cruise’s robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.

This is when the penny drops. GM is walking away from the robotaxi market because it will take too much time and resources to scale the business, presumably to profitability.

GM’s Cruise division was created back in 2016 when the company acquired startup Cruise Automation, a move we flagged at the time in this note:

Now, eight years on, having invested an estimated $10 billion in the venture, and as recently as one year ago, likely ranked in the top 3 as far as US autonomous driving companies go, GM is choosing to walk away. Not only that, they don’t appear to be selling their technology to anybody. In the customary polite nod to the company they are now walking away from with this announcement, here’s how they describe what they’ve gotten from Cruise:

Cruise has been an early innovator in autonomy, and the deeper integration of our teams, paired with GM’s strong brands, scale, and manufacturing strength, will help advance our vision for the future of transportation

Even more bizarrely, the GM press statement concluded by reaffirming their commitment to AD:

“As the largest U.S. automotive manufacturer, we’re fully committed to autonomous driving and excited to bring GM customers its benefits – things like enhanced safety, improved traffic flow, increased accessibility, and reduced driver stress,” said Dave Richardson, senior vice president of software and services engineering”

Eight years and $10 billion to help advance GM’s vision of the future of transportation does not sound like a particularly good outcome. What went wrong with GM’s AD gambit and why is now the right time for them to walk away? Let’s dig in…