I'm forever baffled that GM gave up on Cruise just as soon as Waymo was proving that autonomous driving is feasible.
(Disclaimer: former Cruise employee)
I'm forever baffled that GM gave up on Cruise just as soon as Waymo was proving that autonomous driving is feasible.
(Disclaimer: former Cruise employee)
It seems tough culturally.
If you look at it from an outside point of view, right now Tesla is worth $1.6T, Waymo is worth $130B, and GM is worth $72B. If Cruise were actually a third viable competitor in this race, it would probably be worth more than the rest of GM. Self-driving is just a far more valuable business than car-making.
So from that point of view it would make sense to say, don't worry about the rest of GM too much, you should be willing to sacrifice all of that to increase the changes of making Cruise work.
It's hard to change the culture at a place like GM though. Does the GM CEO really want to take a huge amount of risk? Would they be willing to take a 50-50 shot where they either 10x the company's value or lose it all? Or would they prefer to pay a few billion dollars to avoid that risk.
Using tesla valuation is not useful. It's a meme stock, has AI bs overvaluation over it. It's value is completely unconnected from reality. The car business is declining steadily. It's a good day when the famous CEO doesn't do something incredibly destructive to the brand name. It's just going down.
At the same time, if Musk went away, the stock would crash back to reality but a non-idiot leader could just do impossible, crazy, hard stuff, like ... working on obvious new models and basic steady improvements.
Tesla PE is 398 today (after a drop). Toyota's PE is 13. Toyota at the least is not hemoraging market share, sales, revenue, profits. Tesla is losing on all thoes things. Tesla would need a 30x price reduction to get down to much much more stable and profitable toyota. It's gets worse because Tesla's sales and profit keep going down each quarter.
There's no doubt value in self driving but the overall value is questionable. If there are many companies providing it, and at least waymo is doing great, plus there are many many other companies in China in good shape, the value multiple won't be there.
What's the market value of all taxi compannies combined in the us? It was about $230 billion in 2024 (https://www.skyquestt.com/report/taxi-market). Will tesla get 100% of the us self driving business in the future? No, waymo at least will be a serious market competitor, tesla's service doesn't really work.
Because there are going to be muiltiple competitors with working products (we'll see if/when tesla ever gets there), Tesla's huge valuation will never make sense. Robots are much farther behind than robotaxis (there's no brain, no prototype of a learning system, maybe one day).
This got way too long, I think GM just saw it as a money sink. I think that was a big mistake, though.
It's funny to use "the market value of all taxi companies combined" as a proxy for how valuable the self-driving market will be, because that's exactly the reasoning that led people to underestimate Uber. The market value of all taxi companies combined was pretty small when Uber started.
That said, you could be right! Maybe self-driving will never be worth more than that. It's really hard to tell what business models will be like in the future. But this is the cultural mismatch, it seemed like GM leadership did not want to be in a risky business where they were betting billions of dollars on the success of self-driving. Clearly, to some people, that seemed like a really good bet to make. Time will tell.
>The market value of all taxi companies combined was pretty small when Uber started.
Were there even reliable metrics for this? They only seem small like car dealerships seem small - not of consolidation.
Cosign, there's a reason it took forever and a day for Waymo to actually scale. It's great stuff, changed the way I live, but they gotta wince at the economics.
Anecdote: living in an area where Waymo is becoming mainstream, but we've been seeing their mapping cars drive around streets for five years prior.
Pushing Dan Ammann out was a bad idea. I personally like the original set up at the time. Kyle as the CTO and Dan as the CEO. Kyle was great as an internal CEO, he was calling most of the internal shots anyway. The accident would have played out very differently if Dan Ammann was the CEO IMO.
(Also former Cruise employee)
Was always unclear to me whether DanA was truly pushed out, or if the board (largely comprised of GM execs) wanted to take the company in a different direction than Dan wanted to go, and Dan decided to leave rather than stick around. Ie. IPO vs keep it a majority owned subsidiary.
(Another former employee)
I got the impression that it was a conflict with Mary Barra specifically, not so much the board as a whole. They simply went along with her. The tone of the notice was indicative of being pushed out, not a mutual parting of ways.
(Another former).
As an outsider I assumed it took GM a substantial investment just to realize how far out of their depth they were. It made sense to cut their losses once they figured this out.
Having experience and capability to manufacturer cars has approximately zero benefit to create a self-driving software/sensor stack. It would make more sense for Adobe to create a self-driving car than GM.
Cruise was being operated as a separate company though. As a default, GM could have just not done anything and let Cruise operate as if it were independent. Any synergies (personnel, manufacturing expertise, etc) would have just been a bonus. And if they didn't want the financial exposure, they could have spun it out again.
Instead they chopped it up for spare parts, specifically, sending some Cruise personnel to work on deadend GM driver assistance tech and firing the rest. Baffling.
Reputational risk to GM from the cavalier/shameful way Cruise/Kyle Vogt operated. Tried to hide the fact they dragged a person.
Cruise was always run as a separate business from GM until they shut it down. I think they got too nervous about committing to the Silicon Valley investment style: high capital, high risk, long time horizon, high reward.
I remember GM cars in Herzliya, Israel with cables and cameras held by duct tape circa 2019 after Andrej Karpathy already presented end to end neural network training for Autopilot in Tesla. Looked like very late to the party.
Maybe I'm giving GM too much credit, but it seems to me that GM acquired the technology with the intention to bring it into their vehicles as driver assistance, not autonomous driving. They were pretty candid about not wanting to operate taxis. Cruise itself was embroiled in investigations and was prohibited from operating in SF and voluntarily ceased operations in other markets, which basically made it a target, and since GM had already dumped a few billion into it, it probably made sense to at least get unencumbered rights to the tech.
This is a business with winner-take-all characteristics. Cruise was unlikely to leapfrog Waymo. So it makes the case for continuing to throw money at this very unconvincing.
Cruise was always destined to be "like Waymo, but worse". Tesla, on the other hand, is taking a very different path than Waymo, they have a chance at beating Waymo at their own game and even if they don't beat Waymo, they can be a winner in some specific niche. (For the record, I'm a fan of Waymo.)
What path is that? Their self driving took a huge step back when they dropped Mobileye and honestly I don't think it's been the same since.
1. Leveraging data collected from Tesla owners. In theory, they have the data to learn the driving behavior from almost everywhere in the world.
2. Going directly for vision-only, no geofence system. Waymo's strategy has been to start with a proof-of concept and gradually expand geography and capabilities.
For national security reasons, several other countries won't allow Waymo (or Tesla or any other US company) to "win" in their territory. This will ensure that at least a couple other competitors remain worldwide regardless of whether it makes sense in purely economic terms.
What, why? There's no winner-take-all aspect to shuttling people around. Taxi service is a commodity and taxis-without-drivers will also be a commodity. The switching costs for users are essentially zero.
That's how we get Uber, Lyft, DiDi, Grab, Bolt, WeRide, BlackWolf...
I don't know how you can write that list and come to the conclusion that it's not winner-take-all. In their home market (US), Uber is ~75%, Lyft is ~25%, and all other competitors are sub-1% combined. Didi is similarly dominant in China, and so on. "Completely different markets have different winners taking it all" does not counteract the claim of winner-takes-all in any way, nor does listing utterly insignificant players like BlackWolf. Do you think people saying "winner-takes-all" in business contexts mean one company with literally 100% marketshare globally?
People who drive their own cars are larger than all. You can find single markets where those people are more than all combined world wide.
I liked my one and ride in Cruise however the problem I had was it took 10 minutes or so for my car to depart.
Car arrives. I get in. The car is sitting there getting ready to depart but not moving. After a few minutes I hit the button to call support. Someone tells me it's about ready to go. Ten minutes later it starts leaving.
I have no idea why it took so long to start but it wasn't a great experience.
If you (or anyone else from Cruise) can explain what was going on, that would settle the difference in experience to me.
Waiting for someone to be ready to (actively) monitor it?
“Cruise” is still churning out good tech, they gave a talk recently about using a lightweight [1] type of planner to train an end to end VLA style planner
[1] https://arxiv.org/abs/2502.03349
Cruise was actually just about to return to market after the October incident [1]. We had reached efficacy on all (much harder) internal safety benchmarks showing the car had significantly improved.
GM pulled the rug on us a day or two before announcing. The current Cruise CEO wasn't aware at all either. I have my own conspiracies of why GM did this, but GM also has a long history of fumbling the ball.
[1] https://www.cbsnews.com/sanfrancisco/news/nhtsa-robotaxi-cru...
[2] https://www.theautopian.com/here-are-five-times-gm-developed...!
We should not forget this is the same company that had an amazing lead on everyone in the electric car market 3 decades ago with the EV1. See "Who Killed the Electric Car [0]
[0] https://www.whokilledtheelectriccar.com/
replacing a gas engine with an electric motor and installing a battery pack is not hard. The EV1 was a pretty bad car. The real secret sauce of modern electric cars is cheap Lithium Ion battery packs.
One of my good friends was a driver for Cruise (he sit in the cars while they drove and made tons of notes about the behavior)
He said they were pretty awful and would constantly mess up.
That is true for all algorithmic iterative learning. I'm sure early models from Tesla, Waymo, Zoox, etc. were also driving a few hundred feet before the operators had to take over at first as well.
Yep. Participants of Waymo's early rider program are under NDA.
It seems the time car companies thought more than 4 years ahead was in 2007 and that culture was swiftly removed from the industry out of the economic shock that occurred shortly after.