General Motors to Slash Spending on Robotaxis After Disastrous Year

It was inevitable.

Tired Out

After years of hemorrhaging billions of dollars, General Motors is finally cutting back its spending on its autonomous vehicle division Cruise, The New York Times reports, which may be yet another nail in the coffin for what was not long ago considered a leader in self-driving technology.

The past several months have marked a swift and disastrous reversal for the division. It was only this summer that Cruise announced its plans to expand its driverless robotaxi service to more cities. Those plans are now being put on hold, however, in the face of an enormous amount of public scrutiny over the safety of the robotaxis, coinciding with pushback from both state and federal regulators.

"We expect the pace of Cruise's expansion to be more deliberate when operations resume, resulting in substantially lower spending in 2024 than in 2023," said GM CEO Mary Barra at an investor conference on Wednesday, as quoted by the NYT.

"We must rebuild trust with regulators at the local, state and federal levels, as well as with the first responders and the communities in which Cruise will operate," she added.

Road to Retread

Cruise's run-ins with the law began in late October, when the National Highway Traffic Safety Administration began investigating it after receiving reports of its robotaxis endangering pedestrians, including an incident in which a woman was struck and pinned.

Just days later, the California Department of Motor Vehicles rescinded Cruise's permit to operate robotaxis in the state. Cruise, in crisis mode, then paused fully driverless operations everywhere, including San Francisco, Miami, and Dallas.

Since then, it's pulled all its robotaxis off the road, even those with supervising "safety drivers." Layoffs have also been announced at the company.

The downturn is a massive embarrassment for GM, which has poured ludicrous amounts of funding into its effort to spearhead self-driving. In the third financial quarter alone, the automaker lost $700 million on the division, with a total $8 billion in losses since 2016, according to Reuters.

Now, GM chief financial officer Paul Jacobson says that spending would fall by "hundreds of millions of dollars" in 2024, per the NYT, though the exact amount remains to be determined.

Tarnished Reputation

Still, Barra maintains that GM is optimistic about Cruise's future — even though it's about to slash the hell out of its budget.

"What Cruise has accomplished in the eight years since we acquired the company is remarkable," Barra said, per the NYT.

That may be true, but whatever it's accomplished is now being vastly overshadowed. Locals can attest to Cruise robotaxis being involved in plenty of embarrassing traffic hiccups, like repeatedly causing jams and even getting stuck in wet concrete.

Some are a lot more serious, like barging through an active firefighting scene. A damning report revealed how Cruise even kept its robotaxis on the roads despite knowing they struggled to recognize children.

For now, GM isn't dumping the division outright, but it's seeming a lot more unlikely that Cruise will still be around in the next few years — perhaps an omen for the increasingly controversial self-driving industry at large.

More on Cruise: Government Unsure How Many Pedestrians Have Been Hit by Self-Driving Cars