General Motors said on Tuesday that it would stop developing a taxi that can drive itself, ending a yearslong project that the company spent billions of dollars on and leaving the field to competitors like Tesla, Amazon and Waymo.
The automaker said it would fold its Cruise subsidiary, which was working on that project, into its main operations, allowing formerly separate development teams to jointly develop fully autonomous vehicles for private owners.
The decision removes G.M. from a business that some in the industry believe could someday be worth hundreds of billions of dollars, if researchers can solve formidable technological hurdles. Elon Musk, the chief executive of Tesla, and other Silicon Valley executives have sketched a future where thousands of driverless cars ferry passengers to destinations.
But Mary T. Barra, the chief executive of G.M., suggested that the payoff was too far in the future to justify the expense of developing the technology, which has already cost the company $10 billion.
“You have to understand the cost of running a robotaxi fleet, which is not our core business and is very expensive,” she said during a conference call with Wall Street analysts on Tuesday.
Instead, she said, G.M. will focus on technology that will allow vehicles sold to consumers to steer, accelerate and brake without driver intervention under certain conditions. The goal is to eventually develop cars that can drive themselves without human supervision.
Achieving that level of vehicle autonomy has proved extremely difficult. Cruise suspended a self-driving taxi service in San Francisco last year after one of its cars hit and dragged a pedestrian, causing severe injuries. In July, G.M. said Cruise would restart testing of self-driving cars with humans behind the wheel.
G.M. was one of several companies working on self-driving taxis. Waymo, a unit of Google’s parent company, offers autonomous taxis in San Francisco, Los Angeles and Phoenix with plans to expand to Atlanta, Miami and Austin, Texas. Tesla, Amazon and other companies are also planning to offer such services.
Like virtually all major carmakers, G.M. is coping with tepid demand for cars and is under pressure to invest in new technologies, including electric vehicles, to compete with emerging Chinese carmakers. Analysts say that some Chinese manufacturers have already leapfrogged competitors from Europe and the United States in autonomous technology.
The decision to absorb Cruise into G.M. would save $1 billion per year, the company said. G.M. is under pressure to cut costs after saying last week it would take a more than $5 billion hit to its profit as it restructured its operations in China, which have been losing money.
“Cruise had a super viable product with a substantive amount of capital invested in it, so I’m a bit surprised that they would cease to advance that,” said William Riggs, a professor at the University of San Francisco who studies autonomous vehicles.
But by improving its personal vehicles with Cruise’s technology, G.M. can “immediately reap the rewards” of some of its prior investment while still cutting its losses, he added.
Cruise’s co-founder and prior chief executive Kyle Vogt resigned in November of last year, less than a month after the incident in San Francisco. Eight months later, in June, Cruise named Marc Whitten, a former executive for the video game company Unity, as chief executive.
After the announcement, Mr. Vogt made a statement about G.M.’s decision on the social media platform X.
“In case it was unclear before, it is clear now: GM are a bunch of dummies,” Mr. Vogt wrote.
Ms. Barra said she did not yet know how many jobs at Cruise might be affected by the decision. Last year, Cruise laid off 900 employees out of a work force of 3,800 at the time.
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