General Motors (GM) expects to save up to $1 billion annually following its decision to halt the development of its Cruise robotaxi program, CEO and Chair Mary Barra stated during the company’s earnings call on Tuesday. The move, which was announced two months ago, involves the company ceasing funding for Cruise, its self-driving subsidiary that had been working on commercializing autonomous taxis.
“GM has proposed a restructuring plan that will refocus our autonomous driving strategy on personal vehicles,” Barra explained, emphasizing that the company anticipates significant savings with the end of robotaxi development. GM’s CFO, Paul Jacobson, clarified that these cost savings are contingent on integrating Cruise employees into GM by mid-year.
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Jacobson noted, “We believe our refocused autonomous driving strategy will lead to efficiencies and a $1 billion annual run rate savings in our investment relative to the $1.7 billion we spent on Cruise in 2024.”
Despite the cost-saving initiative, GM faced financial setbacks, reporting a $2.9 billion loss for the fourth quarter of 2024. This was attributed to charges related to the discontinuation of the Cruise robotaxi program and restructuring efforts in China. GM took a $500 million one-time charge for the end of its funding for Cruise, alongside a $4 billion non-cash restructuring charge in its China operations.
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Cruise, which had received nearly $10 billion in investments since its inception in 2016, now faces a restructuring that has left employees uncertain about their futures. Sources indicated that many Cruise workers are waiting to learn whether they will be laid off or offered retention packages to join GM’s efforts on autonomous driving for personal vehicles. GM has already started offering retention packages to select Cruise engineers.
Looking ahead, Barra stated that GM aims to be a leader in Level 4 autonomy, which involves fully automated driving under specific conditions without human intervention. The company plans to continue evaluating the landscape to achieve this goal in the most capital-efficient manner, considering potential strategic partnerships.
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Meanwhile, GM’s advanced driver assistance system, Super Cruise, will likely continue to evolve with the support of Cruise’s self-driving technology. GM’s restructuring plan for Cruise is expected to be finalized later this quarter, with further financial details anticipated later this year. GM CFO Jacobson highlighted that the integration of Cruise employees will affect GM’s North America margin by around 50 basis points in 2025.