Cruise loses funding for robotaxi development from GM.

• On Tuesday, General Motors announced that it will no longer finance the development of robotaxi for its Cruise division.
• The reasons for the Detroit automaker's decision to exit the robotaxi market include the intensifying competition, capital allocation priorities, and the significant time and resources required to expand the business.
• GM announced that it will shift its autonomous driving strategy to prioritize advanced driver assistance systems and autonomous systems for personal vehicles.

On Tuesday, General Motors announced that it will no longer finance the development of robotaxi for its Cruise division.

The reasons for the Detroit automaker's decision to exit the robotaxi market include the intensifying competition, capital allocation priorities, and the significant time and resources required to expand the business.

GM announced that it will shift its autonomous driving strategy to prioritize advanced driver assistance systems and personal vehicle autonomous systems. The company will merge Cruise LLC with its technical teams.

The company currently owns approximately 90% of Cruise and has agreements with other shareholders to increase its ownership to over 97%. It intends to acquire the remaining shares.

At 4:30 p.m. in Detroit, Mary Barra, the CEO and board chair of GM, as well as other company executives, will discuss the restructuring of Cruise with analysts.

Despite spending over $10 billion on Cruise since acquiring the company in 2016, GM is effectively withdrawing from the robotaxi market with its decision.

The company announced in July that it would indefinitely delay the production of the Origin autonomous vehicle as its Cruise self-driving unit tried to relaunch operations. At that time, Cruise shifted its focus to using the next-generation Chevrolet Bolt for the development of its autonomous vehicles.

In October 2023, Cruise halted its autonomous driving operations due to collisions, regulatory conflicts, and suspension of its permits for operating a robotaxi ride-hailing service in California.

Waymo, a U.S.-owned company, has started providing commercial robotaxi services in several major metro areas, while Cruise, owned by General Motors, has struggled. Meanwhile, Chinese autonomous vehicle companies such as Pony.ai and WeRide have also launched in overseas markets.

Tesla unveiled design concepts for a self-driving Cybercab at an event in October. Despite classifying Autopilot and Full Self-Driving software as "partially automated driving systems," Tesla still requires a human to be ready to steer or brake at all times. During an October earnings call, Tesla CEO Elon Musk announced that the company plans to launch a self-driving ride-hailing service in California and Texas as early as 2025.

In San Francisco, both Wayve, funded by SoftBank, and Zoox, owned by Amazon, are testing their autonomous vehicles without steering wheels.

— CNBC's Michael Wayland contributed reporting

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