GM Waves the White Flag on Robotaxis After $10B Blow

It seems General Motors just RSVP’d "no" to the future of robotaxis (and probably left the group chat too). After years of trying to make self-driving cars as common as bad karaoke at office Christmas parties, GM announced on Tuesday that it’s pulling the plug on its Cruise robotaxi project. And this wasn’t some half-baked side hustle for the largest car company in the US… they sank $10 billion into it. (Makes you wonder how much higher their share price could be if they were $10 billion richer right?)

But why the sudden change of heart? Well, let’s just say GM CEO Mary Barra has seen the price tag of running a robotaxi fleet and decided that burning money at that rate isn’t in GM’s "core business." During a call with Wall Street analysts, Barra essentially said, "Look, we’re good at making cars, not managing fleets of robotaxis that cost more than a Kardashian wedding."

Instead of playing catch-up with the likes of Tesla, Waymo, and Amazon in the robotaxi rat race, GM is pivoting (similar to Toyota’s EV pivot). It’s now focusing on developing fully autonomous vehicles for personal use… cars that steer, accelerate, and brake on their own (but probably won’t pick up your Postmates). By folding Cruise’s tech into its main operations, GM aims to "immediately reap the rewards" of its existing investments, according to experts. Let me translate that for you: Why chase the dream of futuristic robotaxis when you can use the same tech to make minivans that parallel park themselves?

Scrapping Cruise’s robotaxi ambitions will save GM over $1 billion annually… money it sorely needs after recent hits like its $5 billion loss from restructuring operations in China. And while Cruise had potential (at least according to its co-founder Kyle Vogt, who called GM "a bunch of dummies" on social media after the announcement), it’s clear GM decided it’s better to cut losses now than keep pouring billions into a project with no guaranteed payoff.

This is a cold hard reality check for the entire robotaxi industry. Competitors like Tesla, Waymo, and Amazon might be rubbing their hands together, but even they’re facing massive hurdles… like regulatory headaches, technological challenges, and, oh yeah, making sure their cars don’t drag pedestrians 20 feet like Cruise did last year in San Francisco.

Speaking of San Francisco, Cruise’s struggles there were a major red flag. From a revoked testing permit to layoffs of 900 employees in December 2023, the writing was on the wall. Even with promises of a $50 billion revenue stream by 2030, the project’s ROI started to look as realistic as investing in crypto sh*tcoins and not ending up living in your mom’s basement.

GM’s retreat echoes Ford and Volkswagen’s decision last year to shut down their Argo AI self-driving project. Building robotaxis, it turns out, is a lot harder than it looks in sci-fi movies. While the likes of Tesla’s Cybercab and Waymo’s expanding fleet in cities like Phoenix and LA are still in the game, GM’s move highlights a growing trend… automakers are realizing that developing self-driving tech is a marathon, not a sprint (and an expensive one at that).

P.S. You know who’s not waving the white flag on their mission anytime soon? Stocks.News trade alerts. Why do you ask? Well, we've successfully predicted 100% or more opportunities nearly every single week for the past six months... and our next alert is set to be released any day now. Meaning, if you haven't done so yet, I'd highly suggest clicking here ASAP and joining the 2,000+ Stocks.News Premium Members who are winning more than DJ Khaled.

Stock.News has positions in Tesla, Waymo, Amazon, Uber, and Ford.