A bit of good news for GM investors: But will it move the needle?

The automotive industry is probably poised to evolve more in the next decade or two than it has in the last century. There is a massive opportunity for automakers with the transition to electric vehicles (EVs), revenue potential from software and subscription as a service, and robotaxis, just to name a few.

For all the interesting potential, all of that General Motors‘ (GM 0.86%) the majority-owned cruise business has apparently done so far is to provide headaches. But finally, there’s some good news for investors hoping that Cruise’s robotax is moving forward again.

what’s going on

Cruise has been rocked by controversy in large part due to a collision with a pedestrian and questionable decision-making by previous management. The company has fired some senior management, laid off employees and temporarily halted travel. Cruise now aims to return to providing fully autonomous rides later this year and potentially charge fares by early 2025, according to a Bloomberg report.

The first piece of good news — probably the less exciting of the two developments, but perhaps the most important — is that the National Highway Traffic Safety Administration is closing a probe into nearly 1,200 robotic cruise axes after the company’s recall resolved hard braking problems. and immobilization.

What’s next?

The previous development is good news for the company’s current situation, but the next development is eyeing what investors hope will be a profitable future partnership. In addition to the fact that Cruise may start charging robotax fares early next year, Uber technologies (UBER 0.54%) will begin offering Cruise robotaxis to customers on its travel platform in 2025.

It’s a unique situation, given that Uber sold its self-driving division in 2020 as the company faced serious cash losses and opted to focus on its core business of transportation and food delivery. That said, the number of self-driving rides on the Uber platform increased sixfold in the second quarter compared to the previous year.

Will this move the needle?

To be clear, no. This is absolutely not going to move the needle for General Motors right now, and probably not even for Cruise itself. This will eventually start on a very small scale, and Cruise will share Uber’s platform with other self-driving competitors. However, this could be an important partnership for Cruise and Uber going forward, especially since the deal was made just a few months before. adzeHis delayed robotaxi product has been revealed.

The truth is that scaling autonomous vehicles will be extremely difficult. It will require innovative technology with huge capital requirements, and that’s to say nothing of regulatory control.

GM Cruise is a long-term play that has huge potential when the industry finally figures out how to scale, market and monetize this business. In a way, the best part of these developments is simply that they’re not all bad news for Cruise. That alone is a positive development for GM investors, who are hoping that its problems are in the rearview mirror and that the automaker will hit a multibillion-dollar homerun with Cruise on the way.