EVs, Batteries, Now Robotaxis -- Upheaval In Detroit -- December 10, 2024

Locator: 48372EVS.

Updates

December 15, 2024: link here. This is truly a bigger story than analysts, Mary Barra, and others are letting on. GM goes back to becoming simply a legacy US auto maker. No real growth opportunities with the demise of the Cruise.

December 12, 2024: link here.

From the linked article:

Eight years and $10 billion later, GM has decided to pull the plug on its grand robotaxi experiment.

The automaker’s CEO, Mary Barra, made the surprise announcement late on Tuesday, arguing that a shared autonomous mobility service was never really in its “core business.” It was too expensive and had too many regulatory hurdles to overcome to make it a viable revenue stream. Instead, GM would pivot to “privately owned” driverless cars — because, after all, that’s what the people really wanted.

“Customers like to drive,” Barra said in a call with investors. “And there’s times they don’t like to drive.”

If some of this sounds familiar, Ford essentially made the same decision two years ago when it pulled its funding for Argo AI, the autonomous driving startup it had financed since 2017. It cited as one of its reasons a belief that partial autonomy — often described as Level 3 or Level 3-plus — will have more near-term payoffs.

Original Post

I've completely lost the bubble on what GM is doing with regard to EVs, batteries, and, now, robotaxis.

I saw the headline on CNBC but it seemed CNBC didn't spend much time on the story. Talk about a debacle. One link here; links are everywhere, including The WSJ. 

The lede:

General Motors said Tuesday it will no longer fund the development of a commercial robotaxi business and will instead absorb its self-driving car subsidiary Cruise and combine it with the automaker's own efforts to develop driver assistance features — and eventually fully autonomous personal vehicles.

The pivot is a remarkable step for the automaker, which acquired the self-driving startup Cruise in March 2016 for $1 billion. Since then, GM has poured billions into the company in a bid to commercialize autonomous vehicle technology via a robotaxi business.

From the story and other sources, a short history of GM and Cruise:

• GM acquired Cruise Automation, a self-driving car startup on March 11, 2016
• price paid: undisclosed; estimated to be between $500 million and over $1 billion
• GM brought on numerous other external investors
• since then, GM has invested over $8 billion in Cruise
• March, 2022: a $2.1 billion acquisition of SoftBank Vision Fund 1's equity stake
• at same time, a separate $1.35 billion investment
• almost exactly one year ago, October 2, 2023, Cruise became embroiled in scandal, following an incident that left a pedestrian stuck under and then dragged by one of its robotaxis
• ultimately, GM took over more direct control of Cruise
• in the fallout, Cruise lost its commercial operating permits from California regulators; laid off 900 employees, about 24% of Cruise's workforce;
• shuttered plans to build a custom robotaxi called the Origin
• Cruise co-founder and CEO Kyle Vogt resiged and GM brought in outsiders to restructure the company, regain trust
• June, 2024: GM hired Marc Whitten -- a video game veteran as CEO of Cruise
• Whitten: a founding engineer at Xbox and Xbox Live
• For me, the bottom line is this:
• this history of Cruise, though interesting, is now but a footnote in GM's story
• going forward, "Cruise" is going to be the ignored stepchild
• Some other data points:
• Waymo, owned by Google-parent Alphabet, is logging "about" 100,000 rides / week in California and Phoenix
• a five-day week makes that about 20,000 rides / day
• NY has "over" 13,000 licensed taxicabs
• at ten rides / day = 130,000 rides / day

From today, google AI reply to a query:

From an earlier post:

December 4, 2024

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Investing

GM should be of some concern.  

A huge day on Wall Street today: Dow breaks through 45,000 for the first time ever. Art Cashin, who famously wore a "Dow 24,000" cap back in 2017, and perhaps one of the finest men on Wall Street, died two days ago. He might have something to say about this/that.

GM was down during regular hours and continued to go down after the market closed. 

The thing that would concern me if I were a GM investor, and I'm not, is the abruptness with which the company ended its relationship / stake in the huge Lansing EV battery factory. GM has/had sunk about $1 billion into the venture, but said it expected to recoup its investment. I assume that was said to "appease" GM's more gullible shareholders. It's chump change.

$1 billion. Sounds like a lot of money. Chump change to the tech CEOs and their companies.  Musk is worth $333.6 billion. That's with a "b." If a company like GM is concerned about $1 billion, there's more to the story. There's a short-term story and a long-term story. 

The last five days have been miserable for GM. And longer term? One could have bought GM for $63.37 / share back on June 4, 2021. Today, GM closed at $53.36. Ouch. 

Ford? Back on June 14, 2022, F was trading for $25.19. Today, F closed at $10.74.

See disclaimer. Just some rambling thoughts. Not making a recommendation to buy, sell, or hold. 

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$1 Billion

That number keeps popping up: $1 billion. 

How one would love to be a fly on the wall during board meetings.

October 18, 2024: Barra says GM will make a profit on EVs this year. Link here. GM's 3Q24 earnings.

EVs are tracked here. 

My question: how closely related are EVs and autonomous driving (to include robotaxis)? Ten years from now, for an EV manufacturer to be successful, will its EVs need to be fully autonomous?

CNBC didn't seem to spend much time on this story (GM / Cruise) today, but something tells me this is a much bigger story than folks seem to be letting on.

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Rivian

Rivian was in the news today; stock rises. News:

Benzinga link here.