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The road continues to be difficult for Robotaxi developers. Earlier this week, leading US robotaxi companies Cruise and Motional lost a major source of funding that could significantly change their future.
Let's start with the cruise. And if you've been following Cruise over the past few months, this news won't come as a shock. GM, which acquired Cruise in 2016, said this week it would cut spending on its robotaxi business by about $1 billion in 2024.
What's surprising is that the cuts appear to be more significant than previously thought. GM said it would reduce spending on Cruise by “hundreds of millions of dollars” in November 2023.
According to GM financial documents, GM has lost an outrageous $8.2 billion on Cruise since 2017. GM also said Cruze lost $2.7 billion in 2023, compared to $1.9 billion in 2022.
But GM CEO Mary Barra insisted this week that Cruze still has a future. “We are committed to cruises,” she said. “If you look at the technology, the basic technology is solid. “We have already externally proven and verified that our cruise technology is safer than human drivers.”
Barra didn't provide specifics about how the Cruise will be relaunched, but GM did offer some hints at the JD Power Auto Summit in Las Vegas on February 1. According to Detroit Free PressGM President Mark Reuss said at the event that it would take four to five years for Cruze to regain public trust.
“I think we will regain that trust in the next four to five years,” he said. “We are continuing to make technological advances toward this.”
“In the next year or two, we will be back on the road delivering goods to people who are unable to travel, while also providing a great product and taxi service. Or for businesses that need an autonomous delivery system,” Reuss added. “So I will do that. And I think we can do it.”
Cruise tries to bounce back from safety concerns.
Cruise has been in free fall since the incident on October 2, 2023. A Cruise robot taxi dragged a woman who had been hit by another car driven by a human. After being struck by the first car, the woman was thrown into the path of her cruise vehicle, which did not brake in time to avoid her.
After the incident, the California Department of Motor Vehicles (DMV) suspended Cruz's self-driving vehicle permit, declaring his robotaxi a risk to the public.
This threw Cruise into confusion. Cruise ceased its nationwide robotaxi operations in mid-October, and co-founder and CEO Kyle Vogt resigned on November 19. Cruise laid off 900 employees, or 24% of its workforce, in mid-December.
Cruise has previously operated or tested robotaxi services in San Francisco, Austin, Houston and Phoenix, and plans to expand to more than a dozen cities by 2024. Cruise, which recently resigned, gave up up to 10,000 autonomous drives per week, according to co-founder and former chief product officer Dan Kan.
Aptiv is no longer funding robotaxi developer Motional.
But Cruz is not alone. Motional, the $4 billion autonomous vehicle joint venture founded by Hyundai Motor Company and Aptiv in 2017, has lost one of its major financial backers. Leading auto parts supplier Aptiv said it would stop raising further financing after suffering millions of dollars in losses.
In an earnings call this week, Aptiv said its 2024 revenue forecast includes a non-cash asset impairment charge of about $340 million related to Motional's loss.
“While our Motional joint venture continues to make progress on its technology roadmap, we have decided not to allocate any more capital to Motional and are exploring alternatives to further reduce our ownership stake,” Aptiv CEO Kevin Clark said on the call. “There is,” he said.
“The costs associated with delivering the technology, primarily in and around the hardware, are a real challenge from an adoption perspective in the on-demand mobility market,” he added.
Motional continues to pursue roadmap and partnerships
Motional is testing its self-driving vehicles with human safety operators in Boston, Pittsburgh, Las Vegas, Los Angeles, and Singapore. At CES 2024, Motional announced plans to collaborate with Kia on its next-generation vehicle, which will enter commercial operation later this decade.
Joe Massaro, Aptiv's CFO, said Motional is “exploring steps to reduce a significant portion of its common stock while working within the framework of the joint venture agreement.”
Motional released the following statement: “We are confident in our funding roadmap and are well positioned for the next phase of commercialization. Our team is focused on expanding driverless services, expanding Motional's commercial partnerships, and strengthening the development of Motional's next-generation robotaxi through collaboration with Kia. Aptiv and Hyundai Motor Group remain Motional shareholders, and there is currently no ownership update. Motional is uniquely positioned through our strategic partnership with our shareholders and we continue to receive strong support and cooperation from them.”
Follow here. Aptiv started as Boston-based nuTonomy in 2013. Founded by Karl Iagnemma and Emilio Frazzoli, it has had early success testing self-driving cars on public roads near the Boston Harbor area.
Auto parts supplier Delphi acquired nuTonomy for $450 million in 2017. However, Delphi soon split into two companies, one of which was Aptiv. Hyundai Motor Company and Aptiv partnered on Motional in 2017.