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GM's autonomous vehicle subsidiary Cruise has decided to abandon plans to develop the Origin, a robotaxi designed without a steering wheel or pedals, opting instead to employ the next-generation Chevrolet Bolt in its operational activities.
In the letter to shareholders published along with the company's second quarter financial results, the president and CEO of General Motors, Mary Barra, communicated that the decision made will simplify the process towards expansion and resolve the regulatory uncertainty that affects the Origin autonomous vehicle due to its innovative design. Barra noted that the cost reduction will allow Cruise to optimize its resources significantly.
During the second quarter, General Motors reported a financing charge of $583 million related to the noncash writedown of Origin assets as well as other restructuring costs. In that same period, the Cruise subsidiary experienced an operating loss of $1.140 billion, which included an impairment charge of $605 million.
Despite Barra's statements that generate uncertainty about the possible return of the Origin model, the vehicle that General Motors planned to manufacture in large quantities is in a practically discontinued state. This determination also gives a new focus to the next-generation Chevrolet Bolt. General Motors plans to begin production of the all-electric Chevrolet Bolt in 2025. A General Motors representative declined to provide information on when the autonomous version of the new Chevy Bolt will be available on public roads.
In an emailed statement, a GM spokesperson said the company and Cruise are realigning their resources to focus development of the next autonomous vehicle on the next generation Bolt instead of the Origin. This decision is based on the search for a more cost-effective and scalable alternative to move more quickly towards an autonomous future, avoiding potential regulatory obstacles in the United States that could limit the expansion of Origin. Notably, the Origin, which lacks a steering wheel and brake pedals, as well as its campfire-seat design, currently does not comply with current regulations.
Kyle Vogt, who was Cruise's CEO and resigned in December, criticized the decision. Vogt is a co-founder of the company.
In a post on the X social network, Vogt expressed his disappointment at GM's decision to end the Origin project, highlighting its potential benefit for cities. Vogt pointed to GM's tendency to gain a competitive advantage for 5 to 10 years, only to lose it by closing projects and ceding its market leadership. He referenced the EV1 case as an example of this dynamic, comparing the situation to the image of someone looking into a crystal ball and deciding that everything is fine.
Since November 2023, the project known as Origin, which at the time represented a promising business opportunity for Cruise and General Motors, has experienced instability. This situation was triggered when the company ceased production of its customized robotaxi, after losing authorization to operate in California and voluntarily suspending its activities in other states. The suspension of driverless implementation and testing permits by the California Department of Motor Vehicles, the agency in charge of regulating autonomous vehicles in the state, took place in October. This event occurred after an incident in which a Cruise robotaxi was involved in an accident with a pedestrian, who had previously been struck by a vehicle operated by a human driver.
Two months after the event, Vogt resigned from his position, approximately 24% of the workforce was laid off, and General Motors regained control of the struggling company. Cruise subsequently appointed Marc Whitten as the new CEO, established the position of chief safety officer, and gradually restarted testing in the cities of Dallas, Houston, and Phoenix. The Cruise company, a San Francisco-based startup acquired by General Motors in 2016, has not yet obtained authorization from California regulators to resume operations in that state.
In January 2020, Cruise unveiled the Origin autonomous vehicle, the fruit of a long-term collaboration with parent company GM and investor Honda, intended to be used in ride-sharing services. At the time, both Cruise and the nascent autonomous vehicle industry were at a more promising and ambitious stage. Even though the industry was in the process of consolidation and deadlines for the implementation of commercial driverless operations had been delayed, automakers and technology companies continued to make significant investments in this area.
The commercialization of autonomous vehicle technology, specifically robotaxis, has proven to be a more expensive and lengthy process than anticipated by various companies. Despite strategies such as staff reduction and expense optimization, Cruise continues to post significant losses of hundreds of millions of dollars each quarter.
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