General Motors just announced: “We are cutting off Cruise.”
In a strong recovery for L4, many long-time L4 players lined up to go public. In a year where Robotaxi rapidly cut costs and set new records for scale and speed— Cruise, once a star unicorn in the autonomous driving arena and a top player alongside Waymo and Baidu Apollo, has burned through 70 billion and approaches its end. General Motors suddenly cut off support for Cruise. On Tuesday afternoon, GM released an official statement.
Cruise will no longer invest in its Robotaxi business. Mary Barra, GM’s CEO, clarified this shift. GM is not abandoning Cruise. Instead, it is changing its autonomous driving strategy. The focus will shift from L4 and Robotaxi to mass-producing advanced driver assistance in passenger vehicles. The goal is to achieve full autonomy through data iteration, similar to Tesla’s approach. GM provided two reasons for exiting Robotaxi. First, external competition is fierce, and costs are high. Second, Cruise’s team and assets will merge with GM’s tech team. They will focus on developing smart driving for mass-produced vehicles.
When General Motors acquired Cruise, it brought in many external investors. Now, under the new arrangement, GM will buy back shares from these investors, raising its ownership to 97%. In the future, GM will decide the fate of the Cruise team and management. It will also determine the business direction and operations. In this scenario, it’s uncertain if another player named “Cruise” will exist in the autonomous driving and smart vehicle market. The end for Cruise came swiftly. It fell from its peak just a year after its Robotaxi faced a serious accident. Cruise’s journey began in 2013 when Kyle Vogt founded the company in San Francisco. He aimed at the great prospects of driverless cars and autonomous driving, making it one of the most notable innovative companies. Kyle has a background in technology and engineering. He was born in the U.S. and developed an interest in autonomous driving during his teenage years. In 2004, he enrolled at MIT to study computer science and electrical engineering. During this time, he participated in the DARPA competition, which later changed the course of autonomous driving.
In its first three years, Cruise launched a series of prototypes and test vehicles based on the Nissan Leaf platform. It focused on developing L4 autonomous driving technology. Three years later, Cruise accepted a buyout offer from General Motors and became a wholly-owned subsidiary. GM promised Cruise independence to advance technology and commercialization. It also offered access to its manufacturing experience and resources to accelerate progress. GM kept its promise. Since 2018, Cruise attracted a $2.25 billion investment from SoftBank’s Masayoshi Son. It acquired the autonomous logistics company Zippy.ai and also purchased Zippy.ai’s lidar chip company, Strobe. At that time, Cruise had ample resources, making competitors envious. It benefited from a major automaker’s support, funding from a tech giant, and access to production vehicle platforms. It developed Robotaxi and autonomous delivery vehicles while mastering core autonomous driving components and supply chains.
In 2021, Cruise reached a peak valuation of $30 billion. Soon after, Cruise announced plans to expand its Robotaxi fleet to 5,000. However, Cruise faced ups and downs, especially after 2018. The company’s growth began to show a more “capital-driven” side. In 2018, Dan Ammann, former CFO and president of General Motors, became CEO of Cruise. In June, after discussions with Masayoshi Son, General Motors staged a “merger and unmerger” with Cruise, reintroducing other external investors. Son quickly brought in Honda, raising Cruise’s valuation to $19 billion and setting a timeline for commercialization and an IPO. Undoubtedly, the capital surge closely related to CEO Dan Ammann’s financial and automotive background. However, this capital progress contrasted with repeated delays in technology deployment. Cruise initially aimed to launch RoboTaxi in downtown San Francisco and promised to allow residents to summon rides in 2019. Yet, the plan faced multiple postponements. Throughout this process, Cruise experienced standout moments.
Cruise launched a redesigned, driverless prototype, the Cruise Origin. It remains in the prototype stage. Aman suddenly left in December 2021. General Motors brought back founder Kyle Vogt to lead Cruise again. By then, Cruise had missed its critical window in the Robotaxi race. Last August, Silicon Valley lifted restrictions on driverless cars. This allowed them to operate and test without time or area limits. Many viewed this as a key milestone for autonomous driving. The goal of the relaxed regulations was to speed up the commercialization of self-driving cars. This change favored autonomous driving companies, provided the vehicles were safe and reliable. However, just a week after the regulations changed, Cruise’s driverless cars began causing accidents. Ten driverless cars stalled late at night, creating a traffic jam. It took Cruise staff nearly half an hour to arrive and move the vehicles. Days later, a Cruise car collided with a fire truck while picking up passengers, injuring some riders. This incident caught the attention of the California Department of Motor Vehicles, which launched an investigation into Cruise.
Cruise must reduce its operations by half. During the day, it can operate no more than 50 vehicles. At night, it cannot exceed 150 vehicles. This demand comes during a sensitive investigation period. The self-driving cars caused serious accidents. They blocked ambulances, delaying care for injured passengers. Some unfortunately died. News spread quickly. People gathered to protest outside Cruise’s headquarters. The company angered both officials and the public. The outcome was inevitable. In October, a self-driving car hit and killed a woman. The DMV revoked Cruise’s self-driving permit. Cruise then announced it would stop production of the driverless model Origin, which lacks a steering wheel and pedals. The company will reassess its autonomous driving strategy. The initial assessment led to layoffs. Cruise cut temporary workers responsible for operating and maintaining the vehicles. It also announced upcoming layoffs for full-time employees. CEO and founder Kyle Vogt resigned at the end of the year, leaving Cruise entirely.
From this moment, GM likely reconsiders Cruise’s future. The final trigger for GM to cut the Robotaxi business and merge the Cruise team may be Cruise’s recent admission of providing false information during a regulatory investigation. At this moment, the other two global leaders in Robotaxi are thriving. Waymo currently provides over 170,000 Robotaxi services weekly in North America and has removed safety drivers. Industry insiders estimate Waymo’s operational fleet may exceed 2,000 vehicles. The sixth-generation mass-produced Robotaxi, developed in partnership with Zeekr, will hit the road early next year. After Google’s latest funding round, Waymo’s valuation has surpassed $45 billion. Baidu Apollo has launched in dozens of cities in China. In Wuhan alone, it operates over 700 vehicles, completing 9,000 rides daily. The RT6 model, costing 200,000, will be deployed soon. Meanwhile, at the moment of Cruise’s downfall, the planned fleet of 5,000 vehicles peaked at just over 100. GM’s total investment in Cruise has exceeded $10 billion. What is the impact? Will Cruise’s exit from Robotaxi negatively affect the Robotaxi and L4 sectors? Not necessarily. The costs for Robotaxi platforms and autonomous driving kits have significantly decreased, with further reductions possible. Currently, the operating costs per vehicle match those of dedicated ride-hailing services, bringing the commercial model within reach.
Waymo and Apollo have made progress in implementation. Pony.ai and WeRide, among other L4 players, have successfully gone public. This shows that autonomous driving is entering a new peak. Cruise’s exit proves that L4 differs significantly from L2+ in technology, application scenarios, business models, and operations.
Car manufacturers entering the market may not be the best choice. Therefore, GM’s decision to cut off Cruise isn’t a setback for L4. It reflects a regretful failure shaped by history, circumstances, technology, and team dynamics.