Bruised Cruise Shifts Gears in Scaled-Down Robotaxi Comeback Plan

In a bid to restore trust and improve safety culture, Cruise executives are taking a measured approach to revamp the company’s autonomous vehicle business. The subsidiary of General Motors (GM) has faced numerous challenges in recent months, including a series of setbacks that led to production pauses, layoffs, and permit suspensions.

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A Shift in Strategy

The first steps towards rebuilding were outlined in an internal email sent by Mo Elshenawy, who took over as president after Kyle Vogt’s resignation. The company is scaling back its ambitious plans for the Origin robotaxi and focusing on its current platform, the Chevy Bolt AV.

According to Elshenawy, this more "realistic" approach will enable Cruise to build trust with regulators and communities while prioritizing safety culture improvements. While development of the Origin program will continue, production will not resume in 2024.

A More Cautious Approach

The company’s decision to pause production on the Origin robotaxi is a significant departure from its previous multi-city launch strategy. Instead, Cruise plans to relaunch operations in just one city, where it can prove its performance and safety record before expanding to other locations.

"This approach will allow us to focus on building trust with regulators and communities while prioritizing safety culture improvements," Elshenawy said in the email.

Addressing Employee Concerns

The internal email also addressed concerns surrounding the employee share-selling program, which was suspended for the fourth quarter. Vogt had reversed this decision earlier, but employees were still waiting for more information.

According to the email, employees who own restricted stock units (RSUs) that settled between January 2023 and October 2023 will be eligible for a new tender offer to help with tax qualifications.

A Month of Turmoil

The internal email comes just three days after Vogt’s abrupt resignation and about a month after the California Department of Motor Vehicles suspended Cruise’s permitsto operate self-driving vehicles on public roads following an October 2 incident.

In that incident, a pedestrian was run over and dragged by a Cruise robotaxi for approximately 20 feet. The company had withheld seven seconds of video footage, which showed the robotaxi attempting to pull over and subsequently dragging the woman.

A Difficult Road Ahead

Cruise’s troubles began earlier this year when it faced increasing opposition from city officials in San Francisco, followed by investigations and pressure to stop operations. Without commercial permits to operate in San Francisco and an internal decision to pause its driverless fleets in other states, the company laid off contract workers.

The suspension of permits has left Cruise with limited options for testing and development, further exacerbating the challenges faced by the company.

The Road to Recovery

While it’s unclear when Cruise will restart operations, Elshenawy provided some insight into the company’s plans. "We will relaunch in just one city at first," he said. "This approach will allow us to focus on building trust with regulators and communities while prioritizing safety culture improvements."

The internal email has sparked renewed hope among employees and investors that Cruise is taking steps towards recovery. However, the road ahead remains uncertain, and it’s too early to predict whether this measured approach will be enough to put the company back on track.

What’s Next for Cruise?

As Cruise navigates its challenges, several key developments will shape the company’s future:

Restarting Operations: The decision to relaunch operations in one city at first is a crucial step towards rebuilding trust and safety culture.
Origin Robotaxi Development: While production on Origin has been paused, development of the program will continue. It remains unclear when production will resume or whether the company will stick to its original plans for multi-city launches.
Employee Share-Selling Program: The new tender offer for RSUs settled between January 2023 and October 2023 is a step towards addressing employee concerns surrounding the share-selling program.

The journey ahead will be long and challenging, but with a more measured approach, Cruise may finally start to rebuild its autonomous vehicle business.

Timeline of Events

October 2: Incident involving pedestrian being run over by a Cruise robotaxi.
November: Vogt resigns as president of Cruise.
December: California Department of Motor Vehicles suspends permits for self-driving vehicles operated by Cruise.

The road to recovery will be long and challenging, but with a more measured approach, Cruise may finally start to rebuild its autonomous vehicle business.