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HomeCruiseGM to cut funding for driverless startup Cruise, report says

GM to cut funding for driverless startup Cruise, report says

It’s not getting any easier for beleaguered autonomous-car startup Cruise after a report on Tuesday suggested its main backer, General Motors (GM), is about to slash funding for the startup.
Cruise recently suspended nationwide testing on U.S. streets following a string of troubling incidents involving its autonomous cars, the most serious of which occurred in San Francisco last month when a Cruise car came to a halt on top of a woman who seconds earlier had been knocked over by a human-driven vehicle.
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GM will reveal its reduced funding plans for Cruise on Wednesday, according to a Financial Times report that cited people briefed on the matter.
The Detroit-based auto giant acquired Cruise in 2016 and since then has invested around $8 billion in the startup. GM’s current quarterly investment in Cruise is believed to be around $700 million, cash that enabled the startup to operate — until recently — its driverless vehicles in California, Texas, Arizona, and Florida.
During testing, Cruise also started to offer taxi rides in its autonomous vehicles with a view to a much wider rollout of such ridesharing services in the future. And while that ambition remains, a cut in funding, as well as challenges with the technology, means that its goal may take much longer to achieve.
Earlier this month, just days before Cruise lost two key personnel in the form of co-founder and CEO Kyle Vogt and chief product officer and co-founder Daniel Kan, GM said in a statement that it had made “a bold commitment to autonomous vehicle technology because we believe in the profound, positive impact it will have on societies, including saving countless lives.”
The automaker said it also believed “strongly in Cruise’s mission and the transformative technology it is developing,” adding that its “commitment to Cruise with the goal of commercialization remains steadfast.”
Cruise said earlier this month that it will “take steps to rebuild public trust,” adding: “Part of this involves taking a hard look inwards and at how we do work at Cruise, even if it means doing things that are uncomfortable or difficult.”
Cruise’s recent difficulties highlight the huge challenges faced by the autonomous-car sector.
Unwilling to continue with its support, Ford and Volkswagen last year closed down autonomous-car specialist Argo AI, though some of its 2,000 employees were offered the chance to continue working on automated driving technology with either of the two automakers.
Recent events leave Alphabet-owned Waymo looking strong as it continues to test its self-driving vehicles in a number of U.S. states. On Tuesday, Waymo announced that riders had taken more than 700,000 fully driverless trips in its vehicles so far this year.
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