July 27 (Xinhua) — General Motors announced to the outside world on July 26 local time that its Cruise division business loss reached $500 million (about RMB 3.3 billion) in the second quarter, more than $5 million (about RMB 33 million) per day, and since 2018, GM has lost nearly $5 billion to lay out its self-driving commercialization business in San Francisco, U.S. The loss is still accelerating now as the company’s Cruise division starts collecting ridesharing fees.
Cruise has worked hard to transform its self-driving technology from a long-term research project into a profitable business. But the market signals are not good, as investors are reducing their bets on technology risks and reassessing the specifics of large-scale deployments of self-driving vehicles on public roads, driven by economic conditions such as global inflation.
So far, shares of self-driving car technology company Aurora Innovation Inc (AUR.O) have fallen 80 percent. Automakers, including Ford Motor Co (F.N), have scaled back investments in their self-driving car units or sought partners to share costs.
Cruise losses have reached $900 million in the first half of 2022, compared with losses of $600 million in the same period last year and before rides were charged. GM executives said that the main reason for the much higher losses is that, after shelving the IPO plan, the company added wages to retain employees, resulting in higher payroll costs.
Chief Executive Officer Mary Barra said Tuesday she remains bullish on Cruise and reiterated her optimistic forecast that the Cruise unit could make $50 billion a year from self-driving car services and technology by 2030.
But whether it can turn around its losses depends on factors beyond GM’s control, such as winning approval from California regulators to significantly extend Cruise’s operating hours and expanding its self-driving cab coverage area.
Cruise applied to U.S. auto safety regulators in February for a waiver to deploy 2,500 self-driving cars without human control systems such as steering wheels and brake pedals. The National Highway Traffic Safety Administration (NHTSA) published the application last week and opened it for public comment for 30 days.