General Motors’ self-driving division Cruise has been faced with a wave of setbacks after a pedestrian was unintentionally trapped under a Cruise AV unit, leading to an NHTSA investigation and a California DMV driverless permit suspension. In light of this, it appears as though some investors in the self-driving company are losing confidence in the efficacy of the technology and the direction GM is taking with its subsidiary.
According to a report from Reuters, Honda claimed that it had no plans to put up more money for Cruise after the subsidiary paused all operations across the United States. As of the end of September 2023, Cruise had $1.7 billion in reserves, meaning it could sustain itself for roughly nine months.
It’s worth noting that Cruise has lost $8 billion in operations since the 2017 calendar year.
“I think it’s a bit of a black hole,” Pzena Investment Management Analyst Lawrence Paustian stated. “It wasn’t too long ago people were really hyped about autonomous and they saw Cruise as this valuable asset. Now everyone’s looking at it as a liability.”
As a result, a law firm will probe GM and Cruise LLC on behalf of investors over concerns that company officers and directors have “engaged in securities fraud or other unlawful business practices.” In addition, General Motors’ stock price plummeted 10 percent last week.
Of course, this all comes as GM announced a round of layoffs for select Cruise contractual workers. More specially, a portion of the workers who helped with cleaning the vehicles, fleet charging and fielding customer support inquiries have been relieved of its duties.
The robotaxi company explained that the layoffs are reflective of its current operations, which have been drastically reduced, although some rides are continuing with a safety driver on board. Cruise will eventually resume its driverless robotaxi service, but has yet to possess a solid timeline.
In the interim, Cruise recently announced a recall to update the collision detection system in its Cruise AV robotaxis, which now provides provisions in the case of another pedestrian-related incident. It also hired an external firm to investigate the company’s response to recent events.