General Motors’ robotaxi company, Cruise, agreed to park half its fleet of self-driving vehicles in San Francisco after one of its driverless cars drove into the path of a firetruck. A passenger in the Cruise car was injured.
Pending a full investigation, one thing is clear: This incident is a setback for Cruise, and perhaps for other automated vehicle operators as well.
Just a week before the Cruise accident, California regulators had given Cruise and Waymo permission to expand their robotaxi services in San Francisco, siding with company arguments that AVs are safe over the objections of city officials who said they are not ready for large-scale deployment.
Now, the AV skepticism of San Francisco officials, and experts such as George Mason University’s Missy Cummings, appears to be vindicated. They have new ammunition to push for slowing down efforts by Cruise and Waymo, Alphabet’s rival robotaxi service, to scale up revenue-generating operations in the nation’s technology capital.
Cruise’s problems are also a problem for GM, its controlling shareholder. Cruise CEO Kyle Vogt told GM investors during the automaker’s Q2 results call that the robotaxi company was on “a trajectory that most businesses dream of, which is exponential growth…”
GM CFO Paul Jacobson told a conference earlier this month that “Cruise has largely solved all the technology challenges,” and is on track to generate $1 billion in revenue in 2025. Cruise is currently on track to lose $2 billion this year. (See page 26 of this deck.)
GM CEO Mary Barra has stood by her Cruise bet even as rivals such as Ford and Volkswagen have put the brakes on AV investments. Barra has told investors that Cruise and other AV tech businesses can scale up rapidly enough to generate $50 billion in revenue for GM by 2030.
Look for some tough questions from investors about all of that, unless Cruise can rapidly resolve its San Francisco problems and get back on track.
