General Motors announced it is ending operations of its Cruise autonomous vehicle division, marking a significant shift in the company’s strategy toward self-driving technology. The decision, revealed on December 10, comes as GM reevaluates the substantial costs associated with developing and maintaining a robotaxi service.
During a call with analysts, GM CEO Mary Barra explained that while autonomous vehicle technology remains important, operating a robotaxi service falls outside the company’s core business model. The decision represents a departure from GM’s ambitious 2021 goals, which included generating substantial revenue from both robotaxi operations and electric vehicle sales by 2030.
The announcement drew sharp criticism from Cruise’s founder and former CEO Kyle Vogt, who took to X (formerly Twitter) to express his disappointment, describing GM’s decision makers as “dummies.” The move caught many Cruise employees by surprise, particularly as the division was working to recover from a serious incident in San Francisco where a pedestrian was dragged by one of its autonomous vehicles, leading to the suspension of its California operating license.
GM’s investment in Cruise has been substantial, with approximately $10 billion spent since acquiring the company in 2016. This includes an $850 million cash injection in June 2023. Moving forward, GM plans to integrate Cruise’s autonomous driving expertise into its existing vehicle programs, potentially enhancing systems like SuperCruise, its current hands-free driving technology available in select Cadillac and Chevrolet models.
The restructuring is expected to generate significant cost savings, with GM projecting a reduction in spending of more than $1 billion annually. Bank of America analyst John Murphy suggests this decision could benefit shareholders through increased capital returns while potentially indicating that competitors like Tesla and Waymo may have superior technology in the autonomous vehicle space.
Earlier this year, Cruise had shown signs of recovery, with plans to resume operations in cities like Dallas and Houston using safety drivers. However, the company faced setbacks, including the
cancellation of its Origin autonomous vehicle project, which Barra had announced in a July shareholder letter. The company opted instead to focus on developing autonomous technology for the next-generation Chevrolet Bolt, citing regulatory challenges associated with the Origin’s unique design.
This strategic shift comes at a time when the autonomous vehicle landscape is evolving rapidly. Waymo currently operates robotaxi services in several U.S. cities, while Tesla plans to launch its own service in 2025. Despite scaling back its robotaxi ambitions, GM remains committed to advancing its autonomous driving technology, particularly through its SuperCruise system.
The company’s decision to absorb Cruise’s team and technology is expected to strengthen its internal autonomous driving capabilities. According to Murphy, this approach may prove more beneficial than relying on external technology providers like Mobileye. GM’s revised strategy focuses on making autonomous vehicle technology more accessible while acknowledging that many consumers still enjoy the traditional driving experience, albeit with enhanced safety features and reduced stress through advanced driver assistance systems.
This development occurs against the backdrop of broader changes in GM’s strategy, including revised electric vehicle production targets and potential adjustments to hybrid vehicle plans based on future fuel economy standards under the incoming administration.