In a movement that marks a before and after in the automotive industry, General Motors (GM) has announced his decision to leave Cruisethe unit in charge of developing technologies for robotaxis.
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This strategic shift reflects the challenges of a sector still in its infancy, characterized by high costs, regulatory complexities and a lack of short-term commercial viability.
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Since its majority acquisition in 2016, GM allocated more than 10 billion dollars to Cruisewith the dream of leading the shared autonomous vehicle market.
However, the results were far from expectations: Modest revenues and a scandal that shook confidence in the technology sealed the project’s fate.
From great expectations to disappointment
Cruise’s promise was to revolutionize urban mobility through a fleet of fully autonomous vehicles. But the numbers painted another reality: barely 500 million dollars in accumulated income compared to an investment that exceeded 10 billion.
Added to this was an incident that occurred in 2023, when an autonomous Chevrolet Bolt hit a pedestrian in San Francisco and then dragged him for several meters.. This event unleashed a scandal that exposed not only the technological challenges, but also the deficiencies in the regulation of the sector.
The California Public Utilities Commission accused Cruise of covering up key information about the incident, resulting in the suspension of his license to operate in the state. This reputational hit was the last straw, pushing GM to reevaluate its position in the autonomous driving market.
Changing course: advanced assistance systems
GM CEO Mary Barra explained that the company will focus its resources on developing advanced driver assistance technologies. These include Super Cruise, a system that allows semi-autonomous driving in certain conditions.
This approach not only reduces financial risks, but also takes advantage of the advances in artificial intelligence and sensors accumulated by Cruise.
By integrating Cruise’s technical team with its core operations, GM expects to cut costs by more than $1 billion annually.
Additionally, the transition allows the company to better align with current market demands, which favor incremental, safe solutions rather than high-risk technological revolutions.
The automotive industry facing an uncertain future
GM’s withdrawal from the robotaxis business is not an isolated case. Ford and Volkswagen have also reduced their efforts in this fieldciting outsize costs and a lack of clear paths to profitability.
Ford, for example, closed its Argo AI unit in 2022arguing that the technology would not offer profits in the short term.
However, not all companies have taken a conservative stance. Alphabet subsidiary Waymo is aggressively expanding its robotaxis fleet in key cities like Phoenix and Los Angeles.
Tesla, under the direction of Elon Musk, continues to promote its controversial system of “full autonomous driving”although it faces criticism for security issues.
A lesson for the future
For GM, the decision to close Cruise is both a recognition of the difficulties inherent in developing disruptive technologies and a lesson in the importance of balancing innovation and profitability.
Instead of pursuing a dream that remains elusive, the company opts for a pragmatic approach that prioritizes viable and commercially attractive solutions.
Barra assured that this change does not mean giving up complete autonomy, but rather redirecting the path towards it. With systems like Super Cruise, GM seeks to build a bridge to a more autonomous future, but in a phased and sustainable way.
Implications for the sector
GM’s withdrawal raises questions about the role of traditional companies in a market that is being shaped by startups and tech giants.
Should automakers focus on incremental improvements, leaving bold bets to other industries? Although there are no definitive answers, the GM case highlights that innovation without a sustainable business model can be a recipe for failure.
For now, investors appear to support this transition. GM shares have risen 47% in the last yearreflecting confidence in the company’s ability to transform setbacks into opportunities.
Time will tell if this pragmatic strategy manages to ensure a competitive future for one of the giants of the automotive industry.