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Although General Motors is most known for their vehicle manufacturing, they have been diversifying its business by investing in new industries such as ridesharing and other mobility ventures since 2016. One of its biggest subsidiaries is Cruise, which focuses on the autonomous vehicle industry. However, Cruise has become more of a liability than a business opportunity. Cruise has recently faced several problems and investigations and accidents in October 2023. An incident on October 2,2023 involved a woman in San Francisco who was “dragged 20 feet by a Cruise self-driving vehicle after the person was struck by another vehicle” (Wayland 2023). The incident led to the entire Cruise robotaxi fleet being grounded, replacing those in top leadership positions, and even some cofounders resigning.GM has also cut spending and has reevaluated growth plans for Cruise. However, GM CEO Mary Barra seems optimistic that the company will be able to move forward with their business plans for Cruise. Barra stated at an Automotive Press Association meeting, “We are confident in the team and committed to supporting Cruise as they set the company up for long-term success with a focus on trust, accountability and transparency” (Wayland 2023).

However, GM and Cruise are not the only companies who are experiencing setbacks in the autonomous vehicle industry. There have been concerns in the industry about the viability of autonomous vehicles in the long term. A research analyst at Guidehouse Insights, Sam Abuelsamid, asserted that “AV technology, while they’ve made a lot of progress with it, is unlikely to be profitable anytime in the foreseeable future, certainly not this decade…If they need to make cuts, robotaxis seem like the obvious place to do that” (Wayland 2023). On the other hand, some Wall Street analysts have hope that GM can work through the obstacles with Cruise. This is based on statements given by several GM investors who claim that, “The plan to pause Cruise operations and reduce spending on Cruise in 2024 are only first steps. Once again, we expect these concerns to be addressed and cured at the capital markets day in early 2024 but expect skepticism to remain in the interim” (Wayland 2023).

GM had hoped to compete with other companies such as Apple, Google, Alphabet (backed by Waymo), and Zoox (backed by Amazon) in the nontraditional auto-industry and car ownership. However, the development and commercialization of autonomous vehicles hasn’t been as easy as once thought. Other competitors such as Ford Motor, Uber, and Lyft have opted to end their autonomous vehicle programs citing the investments as unprofitable. GM has already invested more than $8 billion into Cruise since 2016 and its loses in the third quarter 2023 alone reached a nearly $2 billion loss. Barra has continuously proclaimed her support for autonomous vehicles and their ability to “reduce crashes and roadway fatalities, while also providing transportation for those who may not be able to drive themselves” (Wayland 2023). However, GM has a long way to go, and it first starts with improving the current issues and designing new plans going forward. 

Source: https://www.cnbc.com/2023/12/15/cruise-looks-like-gm-latest-failed-bet-on-trendy-venture.html