Automotive giant General Motors (GM) announced on Tuesday that it will pull the plug on its Cruise robotaxi program.
The company said it won’t longer be involved in the robotaxi business due to “the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.” According to GM, the team behind Cruise will be folded into the main company and will continue working on projects that include semi-autonomous driving technology.
“You have to understand the cost of running a robotaxi fleet, which is not our core business and is very expensive,” GM CEO Mary T. Barra said during a conference call with analysts.
GM acquired Cruise in 2016 and currently owns a 90% stake in the company. It has an agreement to up its share to 97% and will eventually pursue full ownership.
GM invested around $10 billion in Cruise over the years and initially projected it could bring $1 billion in revenue by 2025 and $50 billion in annual revenue by 2030. However, the business brought slim returns so far. According to recent U.S. Securities and Exchange Commission filings, Cruise brought in below $500 million in revenue.
Several other companies recently decided to exit the robotaxi business as well. This included GM’s rival Ford, which halted its autonomous vehicles project Argo AI and will use its technology to develop advanced driver assistance systems.
General Motors stock surged by 2% in after-market trading after the news about the shutdown of Cruise got out. The company’s shares previously closed at $52.74 per share, being 46.30% up year-to-date.