General Motors shared on Tuesday that it would no longer fund a project to develop and produce robotaxis, instead focusing solely on fully autonomous personal vehicles.
The company GM invested in and bought 90% of to create the robotaxis was Cruise, but now the subsidiary will be combined with the automaker’s own team to form a single unit focused on autonomous driving.
“GM is committed to delivering the best driving experiences to our customers in a disciplined and capital-efficient manner,” GM chair and CEO Mary Barra said in a statement.
When it comes to why they cut the robotaxi plans, GM pointed to what it called “considerable time and resources” that would be needed to scale its robotaxi business in what it called a competitive market.
“Cruise has been an early innovator in autonomy, and the deeper integration of our teams, paired with GM’s strong brands, scale, and manufacturing strength, will help advance our vision for the future of transportation,” Barra said.
A report from NPR about GM’s decision also highlighted the financial strain Cruise put on GM. After acquiring a controlling stake for $581 million in 2016, the company has resulted in GM incurring more than $10 billion in operating losses, a GM shareholder report filed with the SEC shared. At the same time, Cruise brought in less than $500 million.
Cruise has made headlines in recent years, not just for GM's acquisition of it, but also because one of the robotaxis was involved in a high-profile accident in San Francisco.
That accident saw the self-driving taxi drag a pedestrian 20 feet after she was struck by another vehicle.
Shortly after, Cruise suspended its operations nationwide, and the Department of Justice and Securities and Exchange Commission launched investigations into the company.
In September, the National Highway Traffic Safety Administration announced the company had agreed to pay $1.5 million for its failure to disclose details about the accident.