decision is that the company is planning to integrate the self-driving GM car subsidiary, Cruise Robotaxi, directly into the company’s efforts to improve various features such as driver assistance, and eventually develop fully autonomous cars GM.
This radical decision is somehow unexpected, given that General Motors purchased the Cruise startup in 2016 for about $1 billion. From that moment on, the company invested billions to improve the startup technology and set up a commercial autonomous cars GM robotaxis business.
“The considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market”, General Motors declared in a statement. When asked about the reason behind this sudden change.
The company anticipates that this decision will reduce GM's annual expenses by more than $1 billion after the proposed plan is completed. It is believed that most likely this proposed plan will be fulfilled in the first half of 2025.
It should be mentioned that currently, General Motors owns almost 90% of the Cruise Robotaxi startup. But, GM announced that is planning to have different agreements with the shareholders in the minority in order to buy back some shares to raise the possession to more than 97% of the autonomous cars Cruise startup.
Even more so, before bringing the Robotaxi startups to the public, General Motors tried to attract various investors such as Microsoft, Softbank, or Honda in order to invest in the company and raise capital. So, in 2022 GM company managed to increase the company ownership by acquiring the SoftBank Vision Fund equity for about $2.1 billion. In addition, the GM company decided to invest another $1.35 billion in the Cruise startup, an investment that aimed to replace a prior commitment made by the fund in 2018.
“I want to be clear that GM made this decision to refocus our strategy because we believe in the importance of driver assistance and autonomous driving technology in our vehicles. This approach would allow us to leverage the strength of GM and Cruise while simplifying and accelerating the path forward, providing customers meaningful benefits along the way.”, Mary Barra, the General Motors CEO and chairman stated in the media call on Tuesday.
It’s important to mention that about a year ago, the Cruise Robotaxi Startup was involved in a scandal after an incident when a pedestrian was dragged by one of the company’s robotaxis. After the tragic incident, the company faced various consequences such as fines, firings, and others. More than that Cruise had to pause its testing rounds in various U.S. states and laid off about 24% of the workforce.
Back then, the company also had plans to launch a line of General Motors electric vehicles but the GM cars plan has to be paused due to the recent events.
Now, the company is determined to create its own autonomous cars GM. Stay tuned for more updates!
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