GM Abandons Cruise Robotaxi Program | Global News Avenue

General Motors (General Motors) said it would abandon its Cruise self-driving ride service due to high costs and the scale required in an increasingly competitive market.

The largest U.S. automaker said the Cruise team will be merged with other technology groups and the company will focus on developing advanced driver assistance systems that include functions such as taking over steering.

“Consistent with GM’s capital allocation priorities, given the significant time and resources required to scale the business and the increasing competition in the robotaxi market, GM will no longer fund Cruise’s robotaxi development efforts,” the company said. ”

GM expects ditching cruise ships to save more than $1 billion a year

GM said it “expects that the restructuring will reduce annual expenses by more than $1 billion upon completion of the proposed plan, which is expected to be completed in the first half of 2025.”

In a report released Wednesday, UBS analysts called the move away from Cruise “another example of GM’s renewed focus on capital efficiency.” They point to GM’s recent sale of a stake in its Michigan electric vehicle (EV) battery plant to South Korean partner LG Energy Solution and its Restructure its operations in Chinabusiness there has been slow.

Analysts say GM’s cancellation of Cruise plans could be a boon for Tesla (Tesla), which “pursues a capital-intensive, end-to-end approach but is able to fund it.”

GM shares, which have gained more than 45% this year through Tuesday, were up about 1.5% in premarket trading. Tesla shares are up more than 60% in 2024 and were up another 1% early Wednesday.