Cruise, a GM Division, Discontinues Origin Autonomous Taxi Project, Incurs $583 Million Expense

Cruise, a subsidiary of GM focused on autonomous driving, has abandoned its ambitions to manufacture the Origin — a specially designed robotaxi without traditional controls like a steering wheel or pedals — choosing instead to incorporate the forthcoming generation of the Chevrolet Bolt into its fleet.

During a presentation to investors on Tuesday, GM’s Chair and CEO, Mary Barra, stated that this shift in strategy would streamline the company’s route to expansion. She noted that the innovative design of the Origin robotaxi could have complicated regulatory approval processes. Additionally, making the switch to a more conventional vehicle model like the Chevrolet Bolt would notably reduce costs per unit, thus enabling Cruise to better utilize its financial resources, as detailed in a letter to shareholders accompanying GM’s earnings report for the second quarter.

GM disclosed a $583 million financial hit for the second quarter, attributing it to the write-down of the Origin’s assets among other restructuring expenses. Cruise itself posted a second-quarter operating loss of $1.14 billion, which included a $605 million impairment charge related to this strategic pivot.

Despite prior suggestions that the Origin would be produced in large quantities, Barra’s remarks suggest a departure from this vision. This stance also repurposes the next-gen Chevrolet Bolt, with GM planning to start producing this all-electric model in 2025. Details on when the autonomous variant of the Bolt will hit the roads remain undisclosed by GM spokespeople.

“In shifting our focus from the Origin to the next-gen Bolt for our autonomous vehicle development, GM and Cruise are leveraging a more scalable and cost-efficient strategy to accelerate towards our autonomous future. This move sidesteps the regulatory approval uncertainties in the U.S. that the Origin faces with its unconventional design lacking a steering wheel and pedals,” explained a representative from GM via email.

The Origin, once hailed as a cornerstone of Cruise’s business model and a potential revenue generator for GM, has encountered significant challenges. This includes a halt in its production since November 2023 following regulatory setbacks and operational suspensions in California and other states after a Cruise robotaxi was involved in an accident with a pedestrian. These events led to substantial organizational changes within Cruise, including leadership changes and layoffs, as the company grapples with regulatory and safety hurdles.

Cruise introduced the Origin in January 2020, marking a significant collaboration between GM, Cruise, and Honda, aimed at revolutionizing rideshare services. At that time, the autonomous vehicle industry was marked by high investment and ambitious goals. However, the complexities and costs of developing robotaxi technology have since led to a downturn in the momentum, with Cruise experiencing substantial financial losses.

In conclusion, the challenges of bringing autonomous vehicle technology, especially robotaxis, to market have proven more arduous and expensive than many in the industry anticipated. Despite downsizing efforts, Cruise’s financial struggles continue, underlining the hurdles in realizing autonomous transportation at scale.