The road for Cruise, the autonomous-car startup backed by General Motors (GM), seems to be getting even rockier as reports suggest that GM is poised to cut funding for the beleaguered company. This follows a series of incidents leading to the suspension of nationwide testing and a serious accident in San Francisco.
According to insiders cited by the Financial Times, GM is set to unveil reduced funding plans for Cruise on Wednesday. This move comes as Cruise grapples with challenges, including a recent incident where one of its autonomous vehicles stopped on top of a pedestrian who had just been struck by a human-driven vehicle.
GM acquired Cruise in 2016 and has invested approximately $8 billion in the startup. Currently, GM’s quarterly investment in Cruise hovers around $700 million, sustaining the company’s operations with driverless vehicles in California, Texas, Arizona, and Florida. However, the reduction in funding may jeopardize Cruise’s ambitions, including its plans for widespread ridesharing services.
While GM expressed a steadfast commitment to Cruise’s mission and transformative technology earlier this month, recent events, including the departure of key personnel, have raised doubts about the company’s trajectory. Cruise is now tasked with rebuilding public trust and addressing internal challenges.
The struggles faced by Cruise echo broader challenges within the autonomous car sector. Ford and Volkswagen shut down autonomous car specialist Argo AI last year, underscoring the difficulty in navigating this complex and evolving industry. Meanwhile, Alphabet-owned Waymo appears to be forging ahead, announcing over 700,000 fully driverless trips in its vehicles this year.
As GM discloses its reduced funding plans, the future of Cruise hangs in the balance, marking a critical juncture for the autonomous vehicle industry.
