General Motors has made a significant pivot in its autonomous vehicle strategy, announcing that it will no longer pursue the development of a commercial robotaxi business. Instead, the automaker will absorb its self-driving car subsidiary Cruise and combine it with its own efforts to develop driver assistance features, with the ultimate goal of creating fully autonomous personal vehicles.

The decision marks a remarkable shift for GM, which acquired Cruise in March 2016 for $1 billion and has since invested over $10 billion in the company. However, the automaker cited the considerable time and resources required to scale the business, as well as an increasingly competitive robotaxi market, as the reasons for the change.

According to GM, the restructuring is expected to lower spending by more than $1 billion annually after the proposed plan is completed, which is expected in the first half of 2025. The company's focus will now be on bringing autonomous vehicle (AV) technology to millions of GM vehicles, with a singular strategy that prioritizes the incremental delivery of autonomous capabilities.

Dave Richardson, Senior Vice President of Software and Services Engineering at GM, will be a key driver of the change. He stated that the aim is to improve GM's hands-free driver assistance system, Super Cruise, and push it to a hands-off, eyes-off system. This technology will be developed in collaboration with Cruise engineers.

It's worth noting that these hands-off, eyes-off systems, also known as Level 3 or L3, are not self-driving cars like those operated by Waymo. Instead, they typically operate only on highways and at reduced speeds, and the driver is still required to take control if needed.

GM owns about 90% of Cruise and has agreements with other minority shareholders to buy back shares and raise its ownership to more than 97%. The company had previously brought on external investors, including Microsoft, Walmart, Softbank, T.Rowe Price, and Honda, to raise capital for its robotaxi ambitions.

In a call with media and analysts, GM Chairman and CEO Mary Barra emphasized that the decision to refocus the strategy was made because the company believes in the importance of driver assistance and autonomous driving technology in its vehicles. She stated that this approach would allow GM to leverage the strength of both GM and Cruise, simplifying and accelerating the path forward and providing customers with meaningful benefits along the way.

The shift in strategy comes just one year after Cruise was embroiled in scandal, following an incident that left a pedestrian stuck under and then dragged by one of its robotaxis. The incident led to investigations, fines, firings, and GM taking more direct control over Cruise. In the aftermath, Cruise lost its commercial operating permits, paused testing in other states, laid off 900 employees, and shuttered plans to build a custom robotaxi called the Origin.

Cruise co-founder and former CEO Kyle Vogt criticized the decision, stating in a post on X that "In case it was unclear before, it is clear now: GM are a bunch of dummies." Vogt resigned from his position at Cruise in the wake of the scandal.

In related news, Cruise admitted to submitting a false report with the goal of influencing a federal investigation into a safety incident last year and agreed to pay a $500,000 criminal fine as part of a deferred prosecution agreement.

GM's decision to pivot its autonomous vehicle strategy marks a significant shift in the industry, and its implications will be closely watched by investors, competitors, and regulators alike. As the company moves forward with its new approach, it remains to be seen how this will impact the development of autonomous vehicles and the future of transportation.