General Motors is investing $850 million in Cruise as the self-driving subsidiary slowly returns to testing in Phoenix, Dallas and, starting Tuesday, in Houston.
GM CFO Paul Jacobson announced the capital injection on stage at Deutsche Bank’s Global Automotive Conference on Tuesday.
“This will help bridge Cruise’s funding until we find the right long-term efficient capital strategy, including potential new partnerships and external funding,” company spokeswoman Tiffany Testo told TechCrunch. He declined to elaborate on the types of new partnerships or how much money Cruz hopes to raise.
The new investment comes less than a year after GM told investors it would cut spending on Cruise by “hundreds of millions” of dollars in 2024, following a series of safety incidents that culminated in the grounding of the entire Cruise fleet in November 2023. Patrick Morrisey, GM’s vice president of corporate communications, told TechCrunch that spending cuts are still in place, despite today’s capital infusion.
“The overall cost reduction announced earlier is based on the fact that Cruise’s total operating costs are lower in 2024 compared to 2023 (operations on hold for several months, smaller fleet, fewer cities, etc….” Morrisey said via email, noting that Cruise still needs money to advance its technology.
In total, Cruise has already raised over $15 billion, per Crunchbase data. GM has spent, and lost, more than $8 billion since acquiring Cruise in 2016, with $3.48 billion lost in 2023 alone. But the new funds show GM isn’t ready to abandon the investment just yet her.
Cruise has struggled since commercializing its fully autonomous driverless robotaxi service in San Francisco and Austin. Shortly after the driver was pulled over, incidents of vehicles blocking traffic, public transit and first responders began to appear on social media. In October, a Cruise robotaxi hit and dragged a pedestrian 20 feet in San Francisco. The pedestrian had initially been struck by a human-driven car and landed in the path of a Cruise robot taxi. Federal and state regulators accused Cruise officials of providing incomplete information in their reports, showing video only of the vehicle braking hard and not dragging the pedestrian as the car attempted a pullover maneuver.
When this additional information came to light, the California Department of Motor Vehicles immediately suspended the company’s licenses to operate self-driving vehicles on public roads, and they have yet to be reinstated.
The DMV confirmed to TechCrunch that Cruise is in discussions to reinstate its licenses in the state. In other states where AV companies don’t have to obtain licenses, Cruise is already making a comeback.
Cruise has launched small fleets in Phoenix, Dallas and now Houston that will operate with a human safety driver behind the wheel. The company aims to validate its technology and move slowly to regain public trust.
