General Motors’ exit from Cruise elicits strong reaction from co-founder Kyle Vogt: Tesla CEO Musk says autonomous driving is a ‘very difficult problem’ – General Motors (NYSE:GM)

General Motors General Motors said on Tuesday it would no longer fund cruise’s robotaxi development, but will consolidate a majority stake into its technology team, fretting Cruise co-founders Kyle Vogt.

What happened: GM believes that robo-taxi development will require significant time and resources to scale, while adding that the robo-taxi market is becoming increasingly competitive.

“GM is committed to delivering the best driving experience for our customers in a rigorous, capital-efficient manner.” Mary BarraChairman and CEO of General Motors. “Cruise is an early innovator in autonomous driving, and the deeper integration of our teams, coupled with GM’s strong brand, scale and manufacturing capabilities, will help advance our vision for the future of transportation.”

GM will now focus on developing driver-assistance technology called “Super Cruise,” which requires active driver supervision, the company said.

Industry leaders react: “Achieving a universal solution for self-driving is a very difficult problem, especially doing it without making the car super expensive,” the Tesla CEO said. Musk Speaking of GM’s decision. Tesla aims to enable autonomous driving through future versions of its Full Self-Driving (FSD) driver assistance software.

“If it wasn’t clear before, it’s clear now: General Motors is a bunch of fools,” Kyle VogtCruise co-founder and former CEO posted on the social media platform: X. In October 2023, one of Cruise’s robotaxis was involved in an accident in San Francisco, and Vogt left the company.

schedule: Before the accident, Cruise was a major player in the U.S. Robotaxi Alliance alphabet inc. Waymo. However, the incident led to increased regulatory scrutiny and the company subsequently suspended all operations in the United States

In early April, the company resumed driving robotaxis driven by human drivers in Phoenix to collect road information, and in June resumed driving robotaxis in Houston and Dallas, Texas. .

In July, the company also said it would abandon plans to produce its Origin self-driving cars and instead focus on self-driving operations with the next-generation Chevrolet Bolt, citing cost and “regulatory uncertainty” about the Origin’s pedal-less cars.

Hope briefly resurfaced, however, when Barra said in October that Cruise hoped to resume operating self-driving cars by the end of the year.

Why it’s important: General Motors currently owns about 90% of Cruise. The company said on Tuesday that it planned to increase its stake to 97% by acquiring shares with other shareholders of the company.

Following this process, the company said it would work with Cruise to restructure its business if approved by Cruise’s board of directors. The automaker expects to reduce costs by more than $1 billion annually once the restructuring is completed, which is expected to be completed in the first half of 2025.

Cruise’s operating loss was $2.067 billion in the nine months to the end of September. The parent company also spent $583 million this year to restructure Cruise.

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Photo courtesy: GM