Destined to be a topic that can’t be avoided by autopilot
On August 1, GM submitted the 2019 second quarter earnings document to the Securities and Exchange Commission (SEC). According to the financial report, in the first half of this year, the auto-driving subsidiary Cruise’s total revenue was 50 million US dollars, the cost was 553 million US dollars, and the total operating income was a loss of 503 million US dollars.
The amount of losses in the past six months is not a small amount. In fact, Cruise’s investment is bigger than in previous years. GM’s 2018 annual report also shows that Cruise lost $1.5 billion in three years and $1 billion in 2019. Half a year later, it just took half. At present, a brother in the field of autonomous driving, Eaglemo, an autonomous driving subsidiary of Alphabet, is a rich family. According to estimates by former employees and industry insiders, Waymo may have to pay $1 billion in “living expenses” from Alphabet in a year.
The speed of burning money also confirms the difficulty of landing automatically. Cruise, which once vowed to launch a self-driving taxi service before the end of this year, announced on July 25 that it has postponed the plan. The company plans to be in San Francisco. Large-scale deployment, and plans to more than double the test speed from now to the end of the year, but this year will not provide test drive services to the general public.
Cruise CEO Dan Amman said the company will not be able to achieve the goal of launching a large-scale autopilot taxi service in 2019. Cruise will further expand its testing infrastructure in San Francisco to prepare the company for a large-scale launch of a self-driving taxi service sometime in the future. In addition, other autopilot companies and automakers have acknowledged that autopilots are actually going to be used, requiring more time and money than expected.
In April of this year, Ford CEO Jim Hankate said that the company was too optimistic to estimate the arrival time of self-driving cars. Although Ford’s plan to launch a series of self-driving cars in 2021 has not been affected, Hankate also mentioned that due to many complicated problems, due to the limitations of geofencing, the scope of application of these cars will be very limited.
The huge amount of capital investment, the difficulty of technology beyond the initial expectations, security, and policy make the players who enter the game more cautious, and the delay of Cruise is also reasonable. In April of this year, Musk, who will have 1 million Tesla cars on the road to “automatically drive taxis” in 2020, is inevitably suspected of drawing a pie.
Cruise, established in 2016, received a $1.15 billion investment in May this year, with a valuation rising to $19 billion. Backed by GM, Softbank and Honda, it has the world’s largest all-electric self-driving car. The team is one of the world’s auto-driving head players. But the vision of investors who are too optimistic is long overdue. The delay of Cruise may mean that Waymo’s auto-driving taxi service on the Phoenix line is the only self-driving service in the United States for some time to come.
About Cruise’s latest business development, the financial report mentioned that in order to accelerate the commercial operation of the company’s self-driving vehicles in San Francisco, Cruise plans to further strengthen testing and verification work in the second half of the year, and continue to integrate into the local community through publicity and activities. In addition, Cruise, General Motors and Honda’s engineering team will continue to work together to develop an autonomous vehicle for the global market, reshaping consumer expectations for future travel.
As for the future development of Cruise, we will wait and see.