San Francisco-based Cruise receives $850 million boost from parent company GM to fuel self-driving plans
San Francisco, California – Even though 2023 was a challenging year for Cruise LLC, the company is not on the brink of collapse. General Motors, which owns Cruise, announced last week that it would pour an extra $850 million into the self-driving car developer. So far, GM’s total investment in Cruise has exceeded $8 billion, but the returns have been minimal. In 2023 alone, the company, based in San Francisco, recorded losses of $3.48 billion.
Yet, GM does not appear to be following the footsteps of Ford and VW, which previously closed down their autonomous vehicle unit, Argo AI. This new funding from GM will support Cruise’s ongoing expenses. Additionally, Cruise is actively seeking new investors from outside to strengthen its financial position.
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GM to review self-driving division
Paul Jacobson, the CFO of GM, disclosed this investment at the Deutsche Bank Global Auto Industry Conference in New York City. He mentioned that this funding would allow GM some time to reevaluate the future strategy of the division.
In 2023, Cruise experienced several setbacks, including a significant incident on October 2, where a Cruise vehicle was involved in dragging a pedestrian 20 feet after an initial collision caused by another driver. Following this, the California DMV revoked Cruise’s operational permits, accusing the company of concealing video evidence of the event.
Cruise denied these claims but halted operations across the country to rebuild public confidence. In response to these events, San Francisco sued the California Public Utilities Commission (CPUC), which oversees autonomous vehicles in the state, aiming to significantly cut the number of autonomous taxis in the city.
By May 2024, Cruise had settled with the injured pedestrian for an amount reported by Bloomberg News to be between $8 million and $12 million.
Cruise gets back on the road in select areas
Last week, Cruise restarted manual driving operations in Houston and Dallas, and it also launched supervised autonomous driving in Phoenix and Dallas, having initiated manual driving in Phoenix back in April. The company has not yet resumed operations in California, its base state. Founded in 2013 in San Francisco, Cruise has been keen on rolling out its driverless robotaxis in the city, believing that its challenging driving conditions are ideal for preparing its autonomous driving systems for other urban areas.
Cruise is cautiously advancing the reintroduction of its robotaxis to public streets, beginning with manual driving. In this initial stage, a human driver completely controls the vehicle, which helps the company collect crucial road data and develop mapping systems.
The company has also started supervised autonomous driving, where the vehicle operates on its own, but a safety driver is present to intervene if necessary. This step allows Cruise to enhance its data collection and assess the vehicle’s performance in real-world conditions. According to Cruise, this phase is critical for verifying that the autonomous vehicles meet the company’s strict safety and performance standards.
