GM Invests $850M Into Cruise Self-Driving Taxi Company

General Motors’ investment will help with the company’s operational costs

Graham Hope

June 12, 2024

4 Min Read
General Motors Cruise self-driving car undergoing testing on the streets of the Mission District neighborhood of San Francisco, California in 2019.
Smith Collection/Gado/Getty Images

General Motors has committed to investing another $850 million into troubled self-driving subsidiary, Cruise.

The money will be used to help with Cruise’s operational costs after it was forced to pause all activities amid the disastrous fallout following an accident involving one of its self-driving taxis in San Francisco in October last year.

Only now is the company beginning to resume testing on public roads, with Houston announced as the latest city in which it is restarting operations, following Phoenix and Dallas.

View post on X

News of GM’s latest injection of capital came from chief financial officer Paul Jacobson at Deutsche Bank’s Global Auto Industry Conference in New York. He also admitted the company is considering how the business can be funded in the future, including investment from elsewhere.

Jacobson explained: “We are going to put $850 million into Cruise this month. That will be what I would consider to be like a step financing. 

“Given a lot of the repositioning that we’ve done and now relaunching, going forward it’s kind of a pay as you go, but this buys us time to continue to pursue our strategic review going through how we’re going to think about Cruise’s future as they continue to make good progress getting back to autonomous and fully autonomous driving.

Related:Cruise Suspends Self-Driving Taxis Across US

“Six, eight months ago, there was a pool of capital available for robotaxi. We’ve got to earn our way back into that. And right now, we don’t have that. So, getting momentum back in the business is going to require some capital and we’re trying to figure out the best way to provide that.”

The news comes as something of a surprise, given that in January Jacobson confirmed that GM would reduce spending in Cruise by $1 billion over the course of 2024.

That reduction in spending is still in effect due to Cruise’s much lower operating costs, on account of its limited operations.

GM has lost approximately $8.2 billion on Cruise since 2017, including $3.48 billion in 2023 alone. In May it was reported that it had agreed to pay between $8 million and $12 million to the pedestrian injured in the October incident, which saw her dragged along the road for 20 feet by a Cruise self-driving taxi after being struck by a human-driven car.

In the aftermath of that, Cruise lost its licenses to operate in California, was deemed a risk to public safety and suspended all operations nationally. Key execs departed, hundreds of staff lost their jobs and the company was heavily criticized in an independent report for its inadequate response to the affair.

Related:Cruise Self-Driving Taxis Resume Phoenix Operations

While many observers felt this might be sufficient for GM to lose faith in Cruise, Jacobson explained why the company is still providing backing.

He continued: “This is a really important R&D phase, not just for the notion of robotaxi, but ultimately for personal autonomy. And we all know that the next arena of competition in the auto space is going to be fought over vehicle technology and what that does, whether it’s software-defined vehicles or autonomous or Level 2 plus driver assist. We think we’ve got a leg up. Cruise, before the incident on October 2, we logged almost six million driverless miles. 

“I think the level of coordination between GM and Cruise is actually at an all-time high. That’s a good thing going forward. So, I don’t want to give the impression that robotaxi isn’t something that we think can work down the road, just simply saying that the capital requirements of that in the short to medium term kind of overwhelm where we were and that’s what’s causing us to take a little bit of a different strategic look.”

About the Author(s)

Graham Hope

Graham Hope has worked in automotive journalism in the U.K. for 26 years, including spells as editor of leading consumer news website and weekly Auto Express and respected buying guide CarBuyer.

Sign Up for the Newsletter
The most up-to-date news and insights into the latest emerging technologies ... delivered right to your inbox!

You May Also Like