General Motors said it will cut spending on its autonomous driving unit Cruise Automation by about $1 billion this year, continuing the troubles the robotaxi division has had in recent months.
However, GM said it is still committed to developing autonomous driving systems.
The announcement confirms a report last year that GM would scale back spending on Cruise following growing safety concerns after a Cruise robotaxi ran over a pedestrian who had been hit by another human-driven car. The pedestrian was pulled about 20 feet after becoming pinned under a tire as the robotaxi tried to move off the road.
Problems arise
The problems since the accident have mounted for Cruise. According to a report from Reuters, the company disclosed it is under probes by the U.S. Justice Department and the Securities and Exchange Commission due to the crash.
The probes will investigate the mishandling of the accident and the way the company disclosed the information.
These probes come after the California Department of Motor Vehicles removed Cruise’s license to operate driverless vehicles in the state. After this, Cruise paused all supervised and driverless rides in the U.S.
The fallout also resulted in the resignation of Cruise CEO Kyle Vogt and chief product officer Daniel Kan. Nine other executives were fired.
Burning through cash
Mary Barra, CEO of GM, said the automaker will refocus and relaunch Cruise but did not have a timetable for resuming operations.
Barra said Cruise has consumed $1.9 billion in cash just in 2023 and recorded a $2.7 billion pretax loss. This doesn’t even include the $500 million in restricting costs incurred in the fourth quarter when GM cut Cruise’s staff.
