GM slashes Cruise spending by $1 bn amid regulatory scrutiny, commits to self-driving vision

In a bid to recalibrate its autonomous vehicle venture, General Motors announced on Tuesday a cut of approximately $1 billion in spending on its robotaxi unit, Cruise, for the year 2024.

This is based on a Reuters report.

The move comes in the wake of heightened regulatory scrutiny following an October 2 accident in San Francisco involving a Cruise robotaxi and a pedestrian.

Reuters cited GM CEO Mary Barra, who said, "We are committed to Cruise."

Barra also announced plans to "refocus and relaunch Cruise" and assured that the company would soon unveil a timetable for resuming operations.

Barra acknowledged the challenges faced by Cruise, stating, "GM has learned that 'humans expect computers to be much more safe' than human operators."

She highlighted Cruise's commitment to setting a higher safety standard for its autonomous vehicles, emphasising that the company was cooperating with ongoing government investigations into the October 2 accident.

Despite the setback, Barra remains optimistic about Cruise's future, emphasising the importance of retaining software and engineering talent.

The CEO revealed that Cruise's spending in the upcoming year will be directed toward bolstering its technological capabilities, particularly in software development and engineering.

The decision to halt previous plans for expansion to 20 cities has allowed GM to redirect spending away from vehicles and operational personnel.

Following the October 2 accident, Cruise faced scrutiny not only from regulatory bodies but also underwent an internal technical review conducted by engineering firm Exponent.

The review revealed mapping errors and a misidentification of the collision nature, with the vehicle incorrectly categorising the impact as a side collision.

Cruise promptly recalled the affected vehicles and updated its software.

In response to the investigation by the California Public Utilities Commission, Cruise proposed a $75,000 settlement and committed to enhanced disclosures regarding the incident.

Cruise stated that the proposed settlement was a reasonable sum considering its remedial actions and the overall circumstances surrounding the accident.

The aftermath of the October 2 incident saw significant organisational changes within Cruise, with nine executives terminated, including CEO Kyle Vogt and co-founder Dan Kan resigning.

The company also underwent a reduction of a quarter of its staff.

The regulatory probes and disclosures regarding the mishandling of the accident have intensified pressure on GM and CEO Mary Barra, who has consistently defended the company's investment in Cruise.

Despite over $8 billion in losses, Barra previously expressed confidence in Cruise's potential, projecting it could generate $50 billion in annual revenue by 2030.

Cruise, once operating hundreds of unmanned robotaxis across several states, aims to strike a balance between generating revenue and perfecting autonomous technology.

(With inputs from Reuters)