The autonomous Cruise program is nearly $5 billion in the red.
GM has reportedly lost nearly $5 billion on its San Francisco-based robotaxi outfit, Cruise, which started back in 2018. Despite the taxis finally being able to charge for the rides the often Chevrolet Bolt-based taxis provide, the profit margins are nonexistent, and will be for some time.
GM said that it lost $500 million on Cruise in its second-quarter earnings reports. That totals out to around $5.5 million per day, distributed evenly across the 91-day Q2.
GM
According to Reuters, investors are now backing away from the riskier business of investing in fledgling tech, instead reassessing how robotic vehicles will be deployed on public roads. Other outfits have similarly struggled with this, such as Amazon’s Zoox robotaxi service, which is still in its infancy.
Cruise’s losses during the first six months of the year now total $900 million, up from $600 million during the same period last year. Unfortunately for Cruise, it would appear that charging for rides is not putting a dent in the brand’s huge losses. GM execs told Reuters that some of the reasons were higher pay to keep staff around after the brand delayed its initial public offering (IPO).
Despite that, GM CEO Mary Barra said that she still has hope for the brand, and reiterated its profitability. According to Barra, Cruise could generate $50 billion per year in revenue from its automated vehicle services and tech by 2030.
However, Cruise has many regulatory hurdles to overcome, some of which are not only out of Cruise’s control but reasons for investors to be hesitant, stemming the flow of cash. California regulators still have to expand Cruise’s hours of operation and widen the territory covered by the Bolt-based taxis. Until that happens, the amount of money to be made remains finite.
In February, Cruise petitioned regulators to grant certain exemptions, allowing for the deployment of put 2,500 self-driving vehicles without steering, acceleration, or braking inputs. Last week, the NHTSA opened the same petition for public comment for 30 days, after which the decision process can begin.
