General Motors pulls plug on Cruise robotaxi funding

General Motors will stop funding its Cruise robotaxi unit as it pivots to driver assistance technology and personally-owned self-driving vehicles.

Driving the news: The Cruise division was a costly investment for the automaker, losing $3.48 billion in 2023. It was also the source of an expensive safety scandal last Oct., which led to the resignations of key executives.

• General Motors still needs to repurchase the remainder of its share in Cruise. However, company CEO Mary Barra estimates the brand will see around $1 billion in annual cost savings by pulling funding.

• Once the automaker withdraws, Cruise’s board will determine whether to pursue restructuring or close the company down for good.

• Barra says the company will now focus on building improved driver assistance software and building self-driving cars for personal use, similar to Tesla’s planned robotaxi model.

Looking ahead: General Motors’ exit from Cruise comes during a challenging time for the self-driving sector.

• While Tesla plans to enter the scene in 2025 with its own robotaxi, other brands have been struggling to stay in business.

• Without Cruise, the biggest autonomous vehicle company still offering robotaxis in the U.S. is Waymo, which still plans to expand its services.

The bottom line: After years of trying to make things work, General Motors is taking a lead from Tesla, betting that personal-use autonomous vehicles will deliver returns faster than the struggling robotaxi model. Time will tell whether the move pays off.

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