General Motors Invests 850 Million USD in Cruise to Cover Operating Costs
TapTechNews June 12th news, General Motors (GM) is investing 850 million US dollars (TapTechNews note: currently about 6.168 billion Chinese yuan) in its self-driving car subsidiary, Cruise, to help the company cover operating costs. Previously, after a self-driving car collision with a pedestrian in San Francisco, Cruise was forced to suspend its self-driving taxi service.
The chief financial officer of General Motors, Paul Jacobson, announced this investment at the Deutsche Bank Global Auto Industry Conference held in New York City today. This fund will be used to support Cruise's gradual resumption of self-driving car testing in multiple US cities. Cruise said they are looking for new external investors to improve their financial situation.
Even before last year's accident, Cruise has been a money-burning machine for General Motors. Since 2017, General Motors has lost 8.2 billion US dollars on Cruise, of which 3.48 billion US dollars were lost in 2023 alone. Cruise recently agreed to pay at least 8 million US dollars in compensation to the injured woman in the accident on October 2nd of last year.
After the accident, Cruise deactivated all self-driving cars and initiated a comprehensive safety review. The company hired two external law firms to review its safety protocols and determine whether Cruise intentionally concealed the video footage of the self-driving car dragging the pedestrian who was hit to the side of the road from the California Department of Motor Vehicles (DMV). The law firm finally concluded that the video concealment was not intentional. Last year, the company recalled all 950 of its Cruise self-driving cars proactively to update the software and prevent similar accidents from happening again.
The accident also led to the departure of several senior executives of Cruise, including co-founder Kyle Vogt and Dan Kan. The company also carried out layoffs, and a quarter of the employees were fired. Several General Motors executives joined Cruise to handle the aftermath, including the chief legal counsel Craig Glidden, who served as the co-president of Cruise, and Mo Elshenawy, who will soon serve as the chief technology officer.
Last year, Jacobson told investors that the company will 'cut several hundred million' US dollars in Cruise project expenses. However, General Motors did not completely cut off its connection with Cruise like Ford and Volkswagen gave up on ArgoAI. General Motors said they will still continue to support Cruise, this struggling self-driving taxi company, hoping to eventually obtain a return from their huge investment.
Meanwhile, Cruise has been slowly increasing the number of self-driving cars on the road, but currently, they are still driven by safety officers. Cruise chose Houston as its latest test city for self-driving cars and said it will start by testing in a human-driven mode first. In the next few weeks, Cruise will transition to a supervised autonomous driving mode, and the safety officer will be ready to take over the vehicle when necessary. The company also operates self-driving cars in Phoenix and Dallas.