Cruise

General Motors said on December 10, 2024 it will end robotaxi development at its majority-owned, money-losing Cruise business.¹ GM cited capital allocation priorities and the time and resources required to scale robotaxis as the reason for shutting down Cruise.² Cruise had raised more than $10 billion from investors including GM, SoftBank Vision Fund, Honda, Microsoft, Walmart and T. Rowe Price at valuations of up to $30 billion.⁷

Timeline

Money raised

Cruise raised a $4 million seed round in March 2014.⁷ Cruise raised a Series A round at a $90 million valuation in September 2015.⁷ Qualcomm Ventures invested about $2 million in Cruise Automation in November 2015.⁷ Cruise raised $2 billion from General Motors and SoftBank Vision Fund at a $12 billion valuation in May 2018.⁷ Honda Motor invested $750 million in Cruise at a $15 billion valuation in October 2018.⁷ Cruise raised $1.15 billion at a $19 billion valuation led by T. Rowe Price in May 2019.⁷ Cruise raised over $2 billion from General Motors, Microsoft, Honda, and institutional investors at a $30 billion valuation in January 2021.⁷ Walmart led a $750 million investment in Cruise at a $30 billion valuation in April 2021.⁷ General Motors acquired SoftBank Vision Fund's equity stake in Cruise for $2.1 billion and made an additional $1.35 billion investment in March 2022.⁷ General Motors invested $850 million in Cruise in June 2024.⁷

Investors named in the sources: General Motors⁷, SoftBank Vision Fund⁷, Honda Motor⁷, Microsoft⁷, Walmart⁷, T. Rowe Price⁷, Qualcomm Ventures⁷, Spark Capital¹⁰, Y Combinator¹⁰, Maven Ventures¹⁰, Founder Collective¹⁰.

What happened

Cruise was founded in 2013 by Daniel Kan and Kyle Vogt.¹¹ Cruise developed autonomous vehicles for urban ride-hailing services.⁷ Cruise operated as an independent unit within GM's Autonomous Vehicle Development Team.¹⁰ Cruise raised funding from investors including General Motors, SoftBank Vision Fund, Honda, Microsoft, Walmart, and T. Rowe Price.⁷ Cruise's valuation reached $30 billion in 2021.⁷

In February 2022, Cruise became the first company to launch a fared robo-taxi service in San Francisco.³ Cruise welcomed strategic investors like Honda and Microsoft.³ Cruise was building out a driverless last-mile delivery service with Walmart in Phoenix.³ Cruise had 70 of its robo-taxis on the road in San Francisco by the end of 2022.³ On October 2, 2023, a Cruise robo-taxi ran over a pedestrian and dragged her for 20 feet.³

California's Department of Motor Vehicles rescinded Cruise's operational permit in October 2023.³ Cruise voluntarily pulled its vehicles off the streets across the U.S. in October 2023.³ General Motors replaced nearly all of Cruise's management and laid off nearly a quarter of its almost 4,000 employees in late 2023.³ General Motors invested $850 million in Cruise in June 2024 to bridge funding during a strategic review.⁷ On December 10, 2024, General Motors announced it would end robotaxi development at Cruise.¹

GM cited capital allocation priorities and the time and resources required to scale robotaxis as the reason for shutting down Cruise.² GM said it would no longer fund Cruise's robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market.² GM's decision came as a shock to Cruise employees, who were preparing to launch commercial operations in Houston the following week.² GM's decision was reportedly made by CEO Mary Barra in an effort to avoid any potential incidents.² Institutional investors were unwilling to fund Cruise's future, leaving GM with no viable path to commercialize its $9+ billion investment.²

GM burned $9 billion of investment dollars with nothing to show for it.⁵ Microsoft wrote down $800 million of its investment in Cruise.² Honda ended its partnership with GM to bring Cruise powered autonomous vehicles to Japan.² On February 4, 2025, General Motors completed the acquisition of the shares of GM Cruise Holdings it did not already own, making Cruise a wholly owned subsidiary.⁷ GM folded Cruise's technology and engineering teams into its Super Cruise driver-assistance programme and the development of personal autonomous vehicles.⁷

GM said the restructuring would cut spending by more than $1 billion a year.⁷ Cruise employees were blindsided by the shutdown, even as they prepared to launch commercial operations in Houston the following week.² The abrupt move damaged GM's credibility in the autonomy sector, making it harder to recruit and retain technical talent.² Former Cruise employees lost trust in GM.² GM will suffer as talented engineers will forgo joining GM to work on autonomy as they will be afraid that their projects will get canceled with no notice.²

Legal outcomes

• filedCalifornia's Department of Motor Vehicles rescinded Cruise's operational permit.³

Where the founders are now

Kyle Vogt co-founded Cruise and was its president and chief technology officer.³ Kyle Vogt posted on X on December 10, 2024: 'In case it was unclear before, it is clear now: GM are a bunch of dummies.'²

Lessons, as others put them

"GM simply made a decision without thinking it through how it would impact their future autonomous vehicle plans. $9+ billion dollars later, GM has nothing to show for autonomy."The Road to Autonomy²

"The way GM handled this matter has reflected extremely poorly on the company in the autonomous vehicle industry. Former Cruise employees have lost trust in GM. Without trust, GM will have an extremely hard time retaining any technical talent."The Road to Autonomy²

"Detroit has gone 0-2 in building an autonomous vehicle business."The Road to Autonomy²

Sources

1. GM to exit loss-making Cruise robotaxi business, reuters.com, Dec 10, 20
2. GM Pulls the Plug on Self-Driving Unit Cruise, Ending Robotaxi Ambitions, The Road to Autonomy, 2024-12-15
3. In a single night, self-driving startup Cruise went from sizzling startup to cautionary tale. Here’s what really happened—and how GM is scrambling to save its $10B bet | Fortune, Fortune, May 16, 20
5. GM Shuts Down Cruise, Uber's Autonomy Dilemma and Torc's Future, The Road to Autonomy, 2024-12-14
7. Cruise Acquisition, Valuation, Funding & Investors | Multiples, multiples.vc, 4 days ago
8. Cruise Funding: $10B Raised, Investors & Rounds, startupfundraising.com
10. Robotics has its first unicorn: startup Cruise Automation - The Robot Report, The Robot Report, 2016-03-18
11. Cruise IPO Timeline and Financing Details - Forge, forgeglobal.com

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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