GM Pulls the Plug on Driverless, Brake Pedal-less, Steering Wheel-less Robotaxi

No steering wheel? No side-view mirrors? No brake pedal? No thanks.

General Motors shares tumbled more than 6% Tuesday after the company said its struggling driverless taxi division, Cruise, will suspend production of the Origin robotaxi, a van-sized, self-driving pod-on-wheels that lacks conventional driving controls.

Indefinitely Maybe

Cruise said in September 2023 that it was “just days away” from getting the regulatory green light to begin mass production of the Origin. A month later, the company’s self-driving taxis were banned in California after one failed to brake before hitting and dragging a pedestrian in San Francisco — who had been knocked into its path by a hit-and-run involving a human driver — resulting in multiple legal probes. The model involved was not an Origin.

Meanwhile, the National Highway Traffic Safety Administration hasn’t acted on a 2022 petition from Cruise asking for permission to deploy up to 2,500 Origin robotaxis per year. And GM, which has lost over $8 billion on Cruise since 2017, has had to inject more and more capital to keep it afloat amid the regulatory uncertainty — most recently, an $850 million investment in June. Cruise’s new direction will involve a frugal turn and an actual brake pedal:

• Cruise will pivot its focus to self-driving versions of the Chevrolet Bolt electric car, and has restarted test driving in Dallas, Houston, and Phoenix. It’ll also have to focus on competition: Alphabet’s Waymo has 300 vehicles operating in San Francisco and Tesla has pledged a robotaxi unveiling later this year.
• While halting production on the Origin cost GM a $583 million charge, CEO Mary Barra said going forward with the Bolt means “per-unit costs will be much lower.” GM as a whole solidly beat analyst projections in its latest financials, released Tuesday, making $48 billion in revenue against a FactSet estimate of $45.5 billion. 

Golden Sell-Off? Not all analysts were convinced by the stock plunge, instead pointing to GM’s solid financials. “We believe this is just a knee-jerk reaction and the GM quarter was a robust one which should drive the stock higher over the coming weeks and months,” Dan Ives, an analyst at Wedbush Securities, told Reuters.