Later this week, GM’s Cruise Chief Executive Officer Dan Ammann will lead a presentation that will offer supporting details for the company’s projected $50 billion in revenue, which it expects to reach over the next couple of years. The news is surely pleasing to the ears of investors, and is underlined by the fact that Cruise just obtained a permit from the California Department of Motor Vehicles that will allow it to give rides to passengers.
While the permit will enable Cruise to begin offering rides to passengers at nighttime in certain parts of San Francisco at speeds of up to 30 mph, the company would have to apply for a separate permit with the California Public Utilities Commission to begin charging these passengers for rides. Meanwhile, the permit also enables Cruise to use its autonomous fleet for delivery services without a safety driver, which it can charge a fee for.
Other sources of revenue include delivery services in Phoenix, Arizona as well as licensing revenue from Honda Motor Co. According to a Bloomberg report, Cruise had $55 million in revenue in the first half of this year, with GM reporting a $561 million dollar loss during the same time-frame, which it attributes to Cruise.
Aside from the Cruise revenue forecast, the upcoming presentation will also provide updates on Super Cruise, GM’s EV plans, and more details on how the recently announced Ultifi end-to-end software platform can be used to generate even more revenue.
For those who missed it, the new Ultifi software is based on the latest Vehicle Intelligence Platform (VIP), also known as the Global B electric architecture, which acts as the central nervous system of a vehicle. Using this robust new foundation, the Ultifi platform will enable “accelerated development and deployment of software and applications over the air to millions of customers, without affecting based hardware controls.”
That said, reports indicate that the upcoming presentation will emphasize how the automaker will use its new vehicles and sources of income – such as Cruise – to increase revenue and profit.
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Comments
so currently cruise is losing $1bn/year and in the next 2 years, it will generate $50bn in revenue and i’m assuming some profit.
if gm’s stock doesn’t pop on this news, we’ll know wall street is skeptical and gm’s assumptions are dubious.
GM stock has been up 10% the last month, while the overall market has gone down. Most analysts value Cruise higher then GM’s traditional ICE car business which Adam Jonas, and other Wall Street analysts rate as ZERO… No value…
how much would you valuate a company that says that it will go from zero profit and little revenue to being profitable and $50bn in revenue in two years? that is gm’s claim. do you believe it?
if you do, it is worth a lot more than a 10% market cap increase.
Sounds like the Roger Smith playbook has been dusted off-overpromise and underdeliver.
I do not think Cruise will generate $50B in annual revenue in 2 years, but I do think they will in 5-7 years, and will scale and grow fast. Very profitable revenue too!
We will see what GM stock does by the end of October, I would say for me 10% gain from last weeks close would be disappointing, I expect more than that.
@Donavan
Yeah I agree with you. I see that revenue in 5 – 7 years as well.
Cruise and Bright Drop has been the two best Business moves GM has made these last couple of years in my opinion.
I am still not convinced GM can make BEV’s for the everyday Customer. So far just High End vehicles and the Bolt which is catching fire.
Cruise is a money pit. There may be some limited applications in shuttling people from one end of a property to another or for localized delivery, but I do not see people ditching their personal transportation to ride in one of these breadboxes as their primary mode of transportation.
Now take off the blinders!
Cruise could put Taxis, Uber and Lyft out of business. Cruise would be perfect transportation to use for a night out on the town. Or a trip to the airport so one doesn’t have to pay for airport parking. Or business people in town and use Cruise instead of renting a car.
Uber had gross bookings in 2020, a down year due to covid, of well over $50B. Depending on how quick Cruise can expand, $50B of revenue may not be so unrealistic.
so you are saying uber had over $50bn in revenue and still no profit.
i hope gm does better than that.
No! I said Uber had $50B of bookings. A chunk of that $50B goes to the individual Uber drivers and a portion of that stays with Uber as Revenue. Since Uber doesn’t treat a driver as an employee and own the cars used by the drivers, they can’t report the full amount of Bookings as Revenue.
Cruise would eliminate that driver piece of the equation allowing for the full amount of a fare to be Revenue. Cruise will have significant capital investment to start but they should definitely be profitable after a short period of time.
so cruise is going to eliminate uber’s driver cost and replace it with all of the expenses associated with running/maintaining a vehicle.
and of course this is assuming cruise works as advertised. good luck.
@Momolos
Not a problem, GM is well positioned to take more of LG’s money if there is another problem with the batteries.
if they assume that when they stop selling ICE SUVs that those family buyers will jump into driver-less taxis with random smelly covid-infected people… This is the thinking of a depraved mind.
wonder why Japanese auto makers are not discontinuing ICE, nor are Koreans. Maybe they plan to be in business in 2026-on.
I rate Adam Jon-ass as a zero also.
With Covid lurking few will want to autonomously car pool. The pandemic will not be over in two years and has reduced both Greyhound and MRA (NYC) Subway ridership.
The future will certainly be autonomous and if GM can keep this lead into the future Cruise, Bright Drop and GM Defense may end up far more important than failing Cadillac or Chevrolet.
When/if new technologies earn the bulk of GM profit it will be time to consider unloading the legacy brands probably by spin off in N America and sale to SAIC in China.
Good luck with that. People don’t like public transportation. Have you ever seen the cleanliness of a city taxi or city bus? Imagine how much worse it will be without the watching eyes of a driver.
Not to mention who you may be sharing your ride with.
You are clearly not a person that follows statistics, pre COVID Uber and Lyft were growing exponentially, and in the future with cheaper rides, more people will forgo owning a car if they live in city, or have 1 car per family, instead of 3 like we have now.
There will be a post COVID, and life will get back to normal.
too bad their non-existant profits didn’t grow exponentially as well.
Bullcrap. This unit will be lucky to get a tenth of that and I’m being generous.
Autonomous vehicles are the next Huge Software Boom
Hence why nobody can really pinpoint lets say what Tesla Stock will be like in say 10 years.
GM stock will jump pretty significantly if Cruise has Autonomous vehicles bringing in cash.
Lol maybe in California or New York but autonomous vehicles won’t be a huge boom everywhere.
anywhere presently using taxis will want autonomous. The rest of the demand cant support it economically. With the high cost of an autonomous car that needs super charging within certain distances– how does it charge itself ? Are the customers expected to wait around 45 minutes for the charge line/time?
@Jack
Why just California and New York?
Last I checked Uber and Lyft is pretty much everywhere.
Wrong!
Since they will be accident proof and better for the environment (max energy savings) chances are humandriving will be phased out within all 50 states by 2060 except for sport.
It’s a convenience. I’d rather read than drive! The Alabaman and New Yorker can agree on that
You have absolutely no proof whatsoever these drones will be safer. Give them 20 years and then do an apples to apples comparison to these dumpsters on wheels.
Most people could care less about the environment if it means giving up their personal freedom. Speaking of which- and paraphrasing a great patriot – anyone stupid enough to give up their personal freedom for safety deserve neither. The day the government bans driving is the day we become a totalitarian nation.
By the time Gen Z takes control a car will be an extreme luxury due to price plus probably “sin” taxes–like a pack of cigarettes now.
We trade safety for freedom on a daily basis through the laws we ma kn e whether driver’s licenses, seat belts, gun and ammunition restrictions.
If they can get you guns, and they will, cars are definitely toast! Cars no longer symbolize freedom especially to an increasingly urban population and fly over America, as usual, doesn’t get any say.
Autonomous vehicles are evolution just like cars after the buggy. I’m sure people said the end of horse drawn carriage was the start of tyranny due to dependence on gas.
Luckily you won’t be around by 2060 so you have nothing to worry about. The worms will be eating you by then.
I’m glad you’re probably right. I don’t know anyone in their right mind who would relish our means of transportation completely controlled by the government.
I was saying that to Steve 👍
😉
Steve you sir are an idiot
AVs are the next bust. I don’t know of anyone who eager to ditch their cars to ride in one of these things. All it will take is some high profile accidents and/or violent crimes taking place in one of these and the whole idea will implode. gm would be smart to spin off this venture while it is now at peak value.
Tigger – I totally agree. How many people there got their car at 16 and then wanted to ride the school bus at 17 or 18. No going back.
@Tigger
I believe you are misunderstanding this. Yes you will have Autonomy on you own personal vehicle that you will chose to use or not, but that is not where this is ending.
Autonomous will be almost pure profit for GM with consumers. Tesla charges 10K for the software right now. Then there will be Ride Haling AV’s that will replace human Uber and Lyft Drivers. I feel like most people do not realize how much disruption this will cause and just how insane amounts of revenue these Companies (Including GM) will be making from Autonomous software and AV’s
And lets not forget about Truck Drivers. This software will completely upend Huge Industries. Whichever Company wins on Autonomy will basically become the Biggest Company in the Future. That is how insane this transition will become.
we have autonomous trucks right now for cross country – they are called railroads…
These look great to send the 3rd world taxi-drivers back home or into unemployment and save us a bunch of money? but wait — arent we letting in like 1 million of them a year now…. what job will they do that cant be automated ?
I support taking in suffering people but you make a good point. I guess once everything is automated they will drive domestic consumption which is supposed to be America’s strength; however we may one day realize small populations like Japan, UK, OZ or even Israel have an advantage if jobs dry up and a everyone gets a guarenteed wage like Yang takes about. We will probably even have autonomous solders