The Time and Cost of Managing a Robotic Autonomous Vehicle Fleet at the Commemorative 100th Anniversary of the 2023 Loss of a Miami Pedestrian

GM expects to achieve cost savings of $1 billion annually when it completes its acquisition of the remaining shares, Paul Jacobson said.

Although no layoffs have been announced, it is likely that the move will result in layoffs at Cruise. The company decided to pause their testing in Arizona and Texas, as they decide on their next move. The remaining shares of Cruise will need to be purchased by GM, then the board of the company will determine the next steps, which include layoffs, or simply shutting down.

Cruise’s commercial robotaxi service has been on hiatus since October 2023, when one of its driverless vehicles in San Francisco struck and then dragged a pedestrian over 20 feet, severely injuring her. The company has since resumed autonomous testing with safety drivers in Arizona and Texas and had planned to relaunch in California as well.

Barra told analysts Tuesday that GM found that deploying and maintaining a robotaxi fleet is both too expensive and too far away from the manufacturer’s core business of building and selling cars.

“Given the considerable time and expense required to scale a robotaxi business in an increasingly competitive market, combining forces would be more efficient and therefore consistent with our capital allocation priorities,” GM CEO Mary Barra said in a call with investors Tuesday evening.

Instead, the Detroit automaker will focus on development of partially automated driver-assist systems for personal vehicles like its Super Cruise, which allows drivers to take their hands off the steering wheel.

GM plans to sell vehicles which will drive autonomously on some roads, but not all roads, eventually. “We know people everywhere love to drive their own vehicles, but not in every situation,” Barra told analysts.

Cruise and the GM Divide and Strikes: A Strategy for a Low-Complexity, Low-Local, High-Tech Autonomous Vehicle

Cruise has about 2,300 employees and will retain a presence in San Francisco, GM said. It is too soon to talk about employment levels until the restructuring is done, a spokesman said.

Dave Richardson, senior vice president of software and services engineering, said Cruise will bring its software, artificial intelligence and sensor development to GM to team up on improving GM’s driver-assist systems.

There are plans for a new service beyond the areas of Phoenix, San Francisco and Los Angeles. The company said last week that it would be testing the self-made Jaguar in Miami next year, with plans to charge for rides in 2026.

Tesla CEO Elon Musk has said his company plans to have autonomous Models Y and 3 running without human drivers next year. Starting in California and Texas, a robotaxis will be able to drive on its own without steering wheels.

The agency began the investigation after it was reported that “Full Self-Driving” crashes happen when cars encounter sun glare, fog and airborne dust. An Arizona pedestrian was killed in one of the crashes.

It is a step back from the development of autonomously driving vehicles, which have proved difficult to develop than once thought. Two years ago, crosstown rival Ford Motor Co. disbanded its Argo AI autonomous vehicle venture in Pittsburgh that it co-owned with Volkswagen.

Over the years, GM invested billions of dollars in the subsidiary, and eventually bought all of the company from investors, and racked up millions in losses.