With this investment, Cruise will be able to sustain business till the first quarter of next year, buying GM time to come to a decision on the unit’s
…
General Motors Co. is giving its Cruise self-driving vehicle unit $850 million to keep the business going into the first quarter of next year while the automaker figures out what to do next with the unit’s strategy and funding.
Cruise was beginning to generate revenue last year and had ambitions to get to $1 billion in fares charged in 2025. That plan was upended last October after one of its robotaxis struck and dragged a woman, leading California to suspend the company’s license and GM to halt all operations.
Now, GM is reviewing how it will fund the business going forward and will look at sources outside the automaker for cash. The Detroit company is also pondering the best way to use the technology, whether it be for robotaxis or personally owned vehicles that have partial or full autonomy.
Also Read : How self driving cars see roads
“I think this is a really important R&D phase, not just for the notion of robotaxi, but ultimately for personal autonomy,” GM Chief Financial Officer Paul Jacobson said Tuesday at an investor conference in New York. “It’s kind of a pay as you go, but this buys us time to continue to pursue our strategic review.”
Also Read : Honda, along with GM and Cruise, to launch driverless ride hailing service in Japan from 2026
GM slashed USD one billion from Cruise’s costs by cutting 25 per cent of the workforce and halting its expansion into new markets. Cruise ended the first quarter with $700 million in cash after losing $442 million, according to GM filings. The unit also has a $3.4 billion line of credit with lender GM Financial, but that facility is intended to be used to buy vehicles and parts from GM, the filing said. The company recently resumed testing of its self-driving cars in Phoenix and Dallas and added Houston.
First Published Date: 13 Jun 2024, 06:36 AM IST
