Michael Vi
General Motors (NYSE:GM) is expected to announce a cut in spending for the Cruise self-driving unit during an investor event on Wednesday, according to FT.
The development is not a major surprise with self-driving tests paused in California while accidents in the San Francisco area are investigated. The self-driving vehicle business also lost its Chief Executive Officer and Chief Product Officer to recent resignations.
GM’s (GM) Cruise had a long-term revenue target of $50B by 2030, which is likely to be revised due to the slowdown in coming to the market with a commercial service. The Cruise segment racked up losses of $1.9B for the first nine months of the year.
“Though self-driving technology has progressed over the last decade with several major entrants globally, companies are struggling to deploy a reliable and financially sustainable robotaxi business that meets with the approval of regulators and safety officials,” noted Seeking Alpha analyst Doron Levin on Cruise’s struggles.
Shares of General Motors (GM) were up 0.20% premarket on Tuesday to $28.55. The forward price-to-earnings ratio on GM is now below 4.00.