GM Pulls the Plug on Self-Driving Unit Cruise, Ending Robotaxi Ambitions
This Week in The Autonomy Economy is presented by Koop Insurance, a specialist insurance provider focused on robotics and autonomous vehicles.
This Week in The Autonomy Economy, The Road to Autonomy Index declined 0.35%, GM pulled the plug on Cruise, Waymo is gearing up to further expand down the San Francisco Peninsula and Uber’s CFO is trying to calm market jitters over robotaxis.
A week in the autonomy economy that started out sleepy ended with a loud thud. With seemingly no warning or foresight, GM made the hasty decision to shut down Cruise by issuing a press release that said; “Consistent with GM’s capital allocation priorities, GM will no longer fund Cruise’s robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.”
This translates into, we “GM” could not find investors. Institutional investors never believed Cruise could rebound. They took a wait and see approach and unfortunately they were correct—GM was never going to operate a commercial robotaxi service.
While the institutional investors were correct, Cruise employees were busy preparing for the launch of commercial operations next week in Houston. The media had a heads up, first responders knew, regulators knew, but as it turns out, GM had other plans.
Those plans, unfortunately, were not shared with employees who were blindsided by the news. GM burned a lot of bridges and trust in the autonomy community. Trust that will almost be impossible to rebuild.
On the analyst call after the announcement was made on December 10th, GM CEO Mary Barra seemed vastly unprepared, as she was unable to articulate the true reason why Cruise was shut down with no notice to analysts. We know the answer—GM was unable to secure institutional investors for Cruise.
GM simply made a decision without thinking it through how it would impact their future autonomous vehicle plans. $9+ billion dollars later, GM has nothing to show for autonomy.
With Ford and VW shutting down Argo AI in October 2022, after Ford invested $2.7 billion in Argo, one has to wonder what is the future of autonomy in Detroit. What role will Ford and GM play in the future of autonomous vehicles? Will they eventually become contract manufacturers? Will they cease to exist one day in the future?
Detroit needs to look itself in the mirror and ask the hard questions. What are we? What do we want to become? What do we need to do to change how we operate? Today, Detroit does not know these answers. Detroit has gone 0-2 in building an autonomous vehicle business.
As Detroit stumbles, Waymo continues to expand and gain market share from Uber and Lyft. What the exact market share gains are remains unverified and contested. What remains uncontested is that once riders experience Waymo they are overwhelmingly opting for the consistent experience over Uber and Lyft.
An inconsistent experience is Uber and Lyft’s biggest achilles heel. This can fix this by working with their autonomous vehicle partners to develop unique Only on Uber and Only on Lyft Experiences.
Experiences could be the differentiating factor that separates Waymo, Tesla, Uber and Lyft as the robotaxi market matures. Perhaps this is the messaging that Uber’s CFO Prashanth Mahendra-Rajah should deliver to investors along with a roadmap.
The future of autonomy has yet to be written. The market has yet to be truly set. Today, the clear leader in robotaxis is Waymo. Tomorrow it could be Tesla. Only time will tell.
When Tesla launches Cybercab along with FSD Unsupervised, a lot will change. Some for the better, some for the worse. No matter how the market changes, we will be here each and every week to bring you our unique thoughts and insights into the autonomy economy.
Cruise parent GM, Tesla, Uber and Waymo parent Alphabet are The Road to Autonomy Index component companies
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What’s Moving the Markets
GM Pulls the Plug on Self-Driving Unit Cruise, Ending Robotaxi Ambitions
On December 10th, GM, seemingly out of nowhere, announced that they were pulling the plug on Cruise and shutting the company down. The move came as a shock to both the autonomous vehicle industry and employees, as Cruise was planning on launching commercial operations next week in Houston.
We have been told from multiple sources that the decision was made by GM CEO Mary Barra in an effort to avoid any potential incidents. If there was this sense of nervousness about revamping Cruise, why did GM make the decision to go out and hire some of the best talent in the business to reboot Cruise and commit an additional $850 million in funding?
Investors and the autonomous vehicle industry have a lot of questions as this appears to have been a rash decision that was made hastily without much pre-planning or thought. The decision appears to be rushed and this was clearly evident on GM’s analyst call following the news.
Ms. Barra appeared aloof and stressed on the call when analysts asked pointed questions about the business and GM’s plans moving forward. Was the real reason GM did not want to see Cruise launch commercial operations next week? Or was it the fact GM was unsuccessful in raising capital from institutional investors?
If these are the true honest reasons, why was there not an honest conversation between GM and Cruise? Why not start a process to try and sell Cruise, instead of simply shutting it down and merging into the Super Cruise team?
The way GM handled this matter has reflected extremely poorly on the company in the autonomous vehicle industry. Former Cruise employees have lost trust in GM. Without trust, GM will have an extremely hard time retaining any technical talent.
Furthermore, GM will suffer as talented engineers will forgo joining GM to work on autonomy as they will be afraid that their projects will get canceled with no notice.
Where does GM go from here? More importantly, where does Detroit go from here? First Ford and VW folded Argo AI and then GM shuttered Cruise. Detroit does not have a credible autonomy program. L2+ systems are not appealing to consumers once they try Tesla’s FSD.
GM needs a complete reboot when it comes to the future of autonomy. As of today, they do not have a future in autonomy. That future today belongs to Tesla and Waymo as GM squandered the moment away.
Our take: Could this be GM’s EV1 moment 2.0? Only time will tell, but for now GM does not have a credible path forward in autonomy.
Cruise parent GM is a The Road to Autonomy Index component company
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Waymo Continues to Expand in California
As GM pulls the plug on Cruise, Waymo continues their fully autonomous expansion. Waymo has applied for an autonomous vehicle driverless testing permit that would allow Waymo to test fully autonomous vehicles in the city of Pacifica, CA.
Pacifica is a small city (12.59 square miles) located between Half Moon Bay and San Francisco. As part of the permit process, Waymo could be granted the ability to operate fully autonomously in additional areas throughout the San Francisco Peninsula.
It’s only a matter of time until you can land at SFO and take a Waymo to Ritz-Carlton Half Moon Bay for a round of golf followed by cocktails and the daily bagpiper performance at sunset.
The impact that autonomous vehicles will have on the tourism and hospitality industries will be truly immense. It’s only a matter of time until a hospitality brand partners with Waymo to integrate robotaxis into the overall guest experience.
Our take: Soon you will be able to take a Waymo from San Francisco to San Jose. The only question that remains is how large will the fleet have to be to ensure quick pickup times.
Waymo parent Alphabet is a The Road to Autonomy Index component company
Waymo is currently ranked #1 with a bullish outlook on the AUTONOMY LEADERBOARDin the autonomous vehicle category.
Piquing Our Interest
Uber CFO Tries to Calm Market Jitters of the Growth of Robotaxis At an investor conference this week, Uber CFO Prashanth Mahendra-Rajah tried to calm investor nerves by highlighting Uber’s role as a demand aggregator for robotaxis.
Microsoft Writes Down $800 Million in Failed Cruise Investment In 2021, Microsoft invested $2 billion in Cruise valuing the company at $30 billion. This week Microsoft announced it was writing down $800 million of its investment. Microsoft lost 40% of its money.
Honda Ends Cruise Partnership with GM Honda, which was planning to bring Cruise powered GM autonomous vehicles to Japan has ended its partnership with GM. How much Honda lost on their investment in Cruise has yet to be determined.
NVIDIA Ramps Up Autonomous Vehicle Efforts in China NVIDIA is expanding the size of its team in China that is focused on developing new autonomous driving technologies.
Switzerland Legalizes Autonomous Vehicles Beginning in March 2025, it will now be legal to operate a vehicle hands-off on public roads in Switzerland. Vehicles that operate without a safety driver must have remote monitoring capabilities. This is a big step as autonomy continues to go global.
Oxa and DHL Supply Chain Deployed Autonomous Vehicles at Heathrow AirportOver a period of 14 days, DHL Supply Chain deployed an autonomous vehicle powered by Oxa that successfully drove 807 miles in mixed airport traffic.
Volvo Autonomous Solutions and DHL Supply Chain Deploy Autonomous Trucks in Texas DHL Supply Chain is now hauling freight with a Volvo Autonomous Solutions autonomous truck powered by Aurora on the Dallas to Houston lane with a safety driver.
Wayve’s End-to-End AI Approach to Autonomous Driving Alex Kendall and the team at Wayve are breaking the mold and developing an autonomous driving stack that is highly scalable. In an interview with Wired, Alex discusses the Wayve approach to autonomous driving.
Nuro Has Started Gathering Data in Kansas City In an effort to enhance the Nuro driver, Nuro has begun collecting data in Kansas City.
Trump Transition Team Wants to Scrap Crash Reporting Requirement The Trump Transition Team wants to end the current NHTSA crash-disclosure provision in the event of a crash.
📰 Before these stories were featured here, they were available on Autonomy Times. Visit Autonomy Times today to stay up-to-date on the latest news and developments shaping the autonomy economy.
Social Buzz
The Founder Strikes Back
For everything that GM had going for itself with Cruise, it squandered it all away. In the end, GM spent over $9 billion dollars and never built a business or scaled a robotaxi service.
Our take: When the story is written as to why Cruise failed, there will be a lot of finger pointing and second guessing. But there is a pattern, Detroit has been extremely unsuccessful in building an autonomous vehicle business.
Cruise parent GM is a The Road to Autonomy Index component company
A Million Concurrent Trips
Last Friday, 1 million concurrent trips took place on the Uber platform globally. Even as robotaxis scale, the Uber platform continues to grow. What Uber’s future will ultimately look like in autonomy has yet to be determined, but one has to give credit to Dara Khosrowshahi as he manages the business in a turbulent time.
Our take: Uber needs to take control of the autonomy narrative. On this week’s epsiode of Autonomy Markets, Grayson Brulte and Walter Piecyk discussed what Uber needs to do to calm market jitters. Watch the episode here.
Uber is a The Road to Autonomy Index component company
The Road to Autonomy Index® / Weekly Performance
The Road to Autonomy Index® is a high-definition lens into the emerging world of autonomous vehicles. It is the world’s first and only pure-play index designed to measure the performance of the autonomous vehicle/truck market.
For the week of December 9th, The Road to Autonomy Index declined 0.35%, the S&P 500 declined 0.64% and the NASDAQ 100 returned 0.73%. The Road to Autonomy Index outperformed the S&P 500 by 0.29% and underperformed the NASDAQ 100 by 1.08%.
Year to Date (YTD), The Road to Autonomy Index has returned 25.33%
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Latest The Road to Autonomy Podcast
Nuro’s Bold Pivot to Licensing
Andrew Chapin, Chief Operating Officer, Nuro joined Grayson Brulte on The Road to Autonomy podcast to discuss Nuro’s bold pivot to licensing their autonomous driving stack instead of scaling their autonomous robot delivery business.
Watch on YouTube | Spotify | X
Listen on Apple Podcasts
Tuesday, December 10, 2024
Latest Autonomy Markets Podcast
GM Shuts Down Cruise, Uber’s Autonomy Dilemma and Torc’s Future
This week on Autonomy Markets, Grayson Brulte and Walter Piecyk discuss the dramatic turn of events that led GM to abruptly shut down Cruise, just days before a planned driver-out launch in Houston. The decision made by CEO Mary Barra, reportedly stems from fears of another incident.
Watch on YouTube | Spotify | X
Listen on Apple Podcasts
Saturday, December 14, 2024
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