GM is abandoning Cruise robot taxis, which are becoming personal autonomous vehicles

General Motors said on Tuesday it will no longer fund the development of its commercial robot-axi business and will instead acquire self-driving car subsidiary Cruise, which it will combine with the automaker’s efforts to develop driver-assistance features and eventually fully autonomous personal cars.

Pivot is a landmark move for the automaker, which acquired self-driving startup Cruise in March 2016. 1 billion dollars. Since then, GM has poured billions into the company to commercialize autonomous vehicle technology through its robotaxi business.

In a statement, GM said the change was due to “significant time and resources needed to scale the business, as well as an increasingly competitive robotics market.” GM said it expects the restructuring to reduce costs by more than $1 billion annually once the proposed plan is complete, which is expected in the first half of 2025.

GM owns about 90% of Cruise. The company said it has agreements with other minority shareholders to buy back shares and increase its ownership to more than 97%. GM previously attracted a number of foreign investors, including Microsoftwalmart, SoftbankCompanies like T. Rowe Price and Honda wanted to raise the billions needed to bring robotaxis to the public. GM in 2022 Expanded its stake in Cruise and acquired a stake in SoftBank Vision Fund 1 for $2.1 billion. At the same time, GM also invested an additional $1.35 billion in Cruise, replacing an earlier commitment made by the fund in 2018.

“I want to be clear that GM made this decision to refocus our strategy because we believe in the importance of driver assistance and autonomous driving technology in our vehicles,” GM Chairman and CEO Mary Barra said in a call with media and analysts on Tuesday. “This approach will allow us to leverage the strengths of GM and Cruise while simplifying and accelerating the path forward, delivering meaningful customer benefits along the way.”

The dramatic shift in strategy comes just a year after Cruise became embroiled in scandal October 2 event It was run over by a pedestrian and then dragged away by one of their robot taxis. The incident and Cruise’s actions immediately afterward led to investigations, fines, firings, and GM taking more direct control of the once-promising self-driving startup.

As a result, Cruise lost commercial operating permits from California regulators, suspended other tests in other states, He fired 900 workers – about 24% of the workforce – and plans to build a custom robot taxi called Origin. Cruise co-founder and CEO Kyle Vogt resigned and GM brought in outsiders to restructure the company and restore trust. GM hired in June Marc Whitten — a video game veteran who is a founding engineer Xbox and as CEO of Xbox Live – Cruise.

Vogt criticized this decision Type in X“If it wasn’t obvious before, it’s obvious now: GM is a bunch of dummies.”

Cruise in November accepted filing a false report with the intent to influence a federal investigation into a security incident last year. The company agreed to pay a $500,000 criminal fine as part of a deferred prosecution agreement, according to the Justice Department.