General Motors to expand Cruise robotaxi service in US

Detroit Cruise, General Motors’ robotaxi unit, plans to enter a “large number of markets” and scale operations up to “thousands of vehicles” in 2023, COO Gil West told Reuters.

Cruise has announced plans to start offering rides in Austin and Phoenix, adding those cities to its present base in San Francisco. West said that the company plans to expand to more cities in 2023.

“You’ll likely see us expand the number of markets in a large number next year,” he said.

Cruise said it can accelerate application of its technology to other cities using a “repeatable playbook” developed in San

Francisco, Austin and Phoenix. That should start to deliver revenue numbers with more zeros in them, he said.

In June, Cruise became the first company to offer fared rides in autonomous robotaxis to the public in a major city. Initially, the service is operating only at night on designated streets in San Francisco.

The service has not been without hiccups. Shortly after its launch, several Cruise robotaxis stopped operating and blocked traffic for hours until employees arrived and manually moved the vehicles.

The planned launch of the Origin, designed as a purposebuilt automated vehicle, “is a huge unlock” for Cruise because of its lower cost, West said. The Origin is a self-driving shuttle designed to be more spacious and passenger-friendly than a conventional, human-driven car. The vehicle does not have traditional controls such as pedals and a steering wheel, freeing up room for multiple people to share rides.

Cruise is now testing human-operated Origins in San Francisco. Volume production is expected to start in 2023. Up to now, Cruise has operated its limited service in San Francisco with a small fleet of Chevrolet Bolt EVs.

WATCHING CLOSELY

Cruise is also working to expand delivery services. A prototype of an Origin fitted with lockers for goods is on the company’s website. Walmart is an investor, and is now testing Cruise delivery at eight stores in Phoenix. Delivery has “the potential to be a big part of the business”, West said.

Wall Street will be watching Cruise closely in 2023.

The decision by Ford and Volkswagen to pull the plug on their jointly controlled automated vehicle operation, Argo AI, threw the automated vehicle sector into a tailspin. Investors have hammered the shares of public AV tech companies and driven a wave of consolidation deals.

Ford and VW said that they saw no near-term profit in robotaxis. GM CEO Mary Barra is taking the opposite bet. She recently told analysts to expect GM to keep spending $2bn a year, on Cruise’s expansion.

GM has said the operation can generate revenue of $50bn a year by 2030. The shakeout in the AV sector has cleared the field for Cruise to grow. But Cruise faces competition from rival Waymo, which is already operating in Phoenix. Waymo is driving to expand its robotaxi and delivery businesses into Cruise’s backyard in San Francisco and other markets Cruise could have in its sights.

Cruise must also compete with ride-hailing platforms Uber and Lyft. They have to contend with the costs of human drivers but both companies have made efforts to automate ride services. Uber and Lyft already have millions of customers signed up.

They also have experience dealing with local regulators who do not always welcome more competition for public transit or licensed cabs.