Cruise, the robotaxi division of General Motors Company (GM Stock), intends to enter a “large number of markets” and scale operations up to “thousands of vehicles” in the year 2023, according to statements made by Chief Operating Officer Gil West to Reuters.
San Francisco is currently Cruise’s base of operations, but the company recently announced that it would soon begin offering rides in Austin and Phoenix in addition to San Francisco. West stated that the organization has ambitions to expand to additional cities in 2023.
He said, “You’ll probably see us expand the number of markets by a significant number next year.” Cruise is confident that it will be able to speed up the implementation of its technology in other cities by utilizing a “repeatable playbook” developed in San Francisco, Austin, and Phoenix. According to what he said, they should start delivering revenue numbers with more zeros.
According to West, the fact that the cost of Cruise’s planned launch of the Origin, which is designed as a purpose-built automated vehicle, will be lower “is a huge unlock” for the company.
At this time, Cruise is conducting human-operated Origins testing in San Francisco. In 2023, we anticipate beginning full-scale production of the product. Cruise has been operating its limited service in San Francisco with a small fleet of Chevrolet Bolt EVs up until now.
Additionally, Cruise is working on expanding its delivery services, and the company’s website features a prototype of an Origin that has been fitted with lockers for storing goods. Walmart is an investor in Cruise and is in the process of testing the service at eight of its stores in Phoenix. According to West, delivery possesses “the potential to be a significant part of the business.”
When 2023 rolls around, Wall Street will keep a close eye on Cruise.
The entire automated vehicle industry went into a tailspin due to the decision made by Ford and Volkswagen to shut down their jointly controlled automated vehicle operation, known as Argo AI. The shares of publicly traded AV technology companies have been battered by investors, which has driven a wave of consolidation deals.
Both Ford and VW have stated that they do not anticipate any profits from robotaxis shortly. Mary Barra, the CEO of GM (NYSE: GM), is taking the opposite stance. At the beginning of this month, she told analysts that they should anticipate GM to continue spending $500 million per quarter, or $2 billion annually, on Cruise’s expansion.
GM has projected that the operation will bring in revenue of $50 billion annually by 2030. As a result of the consolidation in the AV industry, Cruise now has more room to expand. However, Cruise must contend with rival Waymo, already in business in Phoenix and offers similar services. Waymo is working hard to expand its robotaxi and delivery businesses into San Francisco, which is Cruise’s backyard, and into other markets that Cruise may have its sights set on.
Furthermore, Cruise must compete with ride-hailing platforms Uber and Lyft. They are forced to contend with the expense of employing human drivers. Both of these companies have been working on automating their ride service systems. Both Uber and Lyft have already signed up millions of customers between them.
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The company emphasized that demand for its products is still strong even though the economy is unstable and interest rates are rising. GM has ambitious plans to take the lead in the electric vehicle (EV) market within the next three years when it is anticipated that EV adoption will approach 20% of total industry sales in the United States by 2025.
GM’s stock has increased by 2.3% over the course of the past month, and it finished the most recent trading session at $39.75.
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Author Valerie Remorosa 
