GM General Motors Company

By Tim Higgins and Mike Colias 

SAN FRANCISCO-- General Motors Co.'s autonomous car unit, Cruise, revealed a toaster-shaped robot taxi that it says will be cheaper than taking a human-driven ride-hailing service or driving a car.

Cruise Chief Executive Dan Ammann on Tuesday said the all-electric vehicle, called Cruise Origin, was more than a futuristic vision. "A lot of times, people show these kinds of concept cars and it's just a thing and maybe it will happen and maybe it won't," he told reporters, after taking the stage to reveal the vehicle before hundreds of employees. "This is a fully engineered vehicle that's on its way to production."

The Origin would be a driverless vehicle, without a steering wheel and featuring passenger seats facing each other. The white-and-orange model displayed Tuesday had a roomy interior, seats for six and doors that slide open like an elevator. While it looks big, the vehicle takes up the footprint of an average car, according to Cruise. It was engineered with backup sensors, computing and other critical features, the company said.

Cars without steering wheels can't legally be on public roads today. The industry is still working on technical and safety issues associated with introducing driverless technology.

Mr. Ammann was short on specifics, such as when the vehicles might be deployed on public streets or exact costs for riders. Production plans, he said, are due to be announced in a few days.

GM will build the vehicles while Cruise plans to own and operate them within its own ride-hailing service.

The boxy, shuttle-like design is reminiscent of the other vehicles proposed by companies such as Toyota Motor Corp. and Volkswagen AG. Cruise said the vehicle platform could be configured for commercial deliveries, another use being pursued by driverless car developers.

Cruise in recent years has emerged as a leader in autonomous-vehicle development after landing several large outside investments and receiving upbeat critiques of its technology from analysts. The self-driving car unit has raised more than $7 billion, including commitments of more than $2 billion each from SoftBank Group Corp.'s Vision Fund and Honda Motor Co.

GM in May said Cruise, which is working to develop robotaxis for ride-hailing services, is valued around $19 billion.

On Tuesday, Mr. Ammann said the average ride-hailing service costs several dollars a mile while personal car ownership, depending on the location in the U.S., costs about a dollar a mile. "Our goal is to deliver something that can beat all of them," he said.

In recent years, though, the auto industry's enthusiasm for self-driving cars has been tempered by thorny technical challenges, safety concerns and a lack of regulations on how these vehicles can be introduced on public roadways. Some companies have already pushed back plans to launch commercial services. Predictions made a few years ago of driverless-taxi services operating in some U.S. cities by 2020 haven't come to pass.

Today, most companies testing autonomous vehicles on public roads, as well as a few autonomous shuttle services, include one or two safety operators to ride along and monitor the system.

Cruise, which has boosted its workforce to 1,700 employees from about 1,000 at the start of last year, has been relatively quiet since July, when executives said they would miss a self-imposed deadline for starting an autonomous-vehicle ride-hailing service sometime in 2019.

"We're making really rapid progress on the AV performance but obviously we're still working on something that's never been done," Mr. Ammann told reporters Tuesday. The development timeline was uncertain, he said, adding "but we're moving really quickly."

Driverless-car developers have pressed federal regulators for rules that would let them deploy vehicles without traditional steering wheels or foot pedals--equipment designed for human drivers but not needed in a self-driving car.

A bill that stalled in Congress last year would have directed regulators to set requirements for autonomous vehicles.

A bipartisan group of lawmakers in Congress is drafting another bill, staffers say, but the lack of direction from the federal government is challenging for car companies and startups trying to advance the technology.

Paul Hemmersbaugh, an attorney at law firm DLA Piper who specializes in autonomous-vehicle regulation, said some companies are pulling back on plans to launch vehicles without steering wheels and pedals and are now considering the use of normal cars fitted with autonomous systems.

"It's been difficult for [autonomous vehicle] developers to plan their business models when autonomous vehicles in many instances are unlawful, or the law is ambiguous," said Mr. Hemmersbaugh, also a former GM lobbyist.

Two years ago, GM asked the National Highway Traffic Safety Administration for a waiver to rules that require manual vehicle controls like brakes and steering wheels. The agency hasn't ruled on the request.

Cruise and Honda said in 2018 they would jointly develop an autonomous vehicle that would be built in large volumes for use globally. Honda committed $2 billion over 12 years for the project and invested $750 million for an equity stake in Cruise.

GM executives have said the market for autonomous ride-hailing could exceed $1 trillion, and have suggested that profits from a future service could exceed that of GM's traditional vehicle-manufacturing business.

Investors at times have applauded GM's progress on Cruise, even as record profits from GM's car-making business have failed to significantly lift the company's share price over the long term. GM's stock price surged 13% on May 31, 2018, the day the company announced the SoftBank investment--an unusually big move for a stock that has been stuck in the mid-$30s in recent years.

GM shares on Tuesday closed down 1.7% at $34.99, before the vehicle's unveiling.

Mr. Ammann earlier this year attributed the delay in its robotaxi launch to technical challenges without discussing specifics, calling the effort to put driverless cars on the road "the biggest engineering challenge of our generation." He said the company would focus on logging more test miles and working with the city of San Francisco--the market where it eventually plans to introduce service--to educate officials and the public about autonomous vehicles.

GM Chief Executive Mary Barra in October told analysts during a conference call that the development of the technology is "very much on track."

GM has said it was on pace to spend about $1 billion on Cruise last year.

The company reports fourth-quarter results Feb. 5.

Write to Tim Higgins at Tim.Higgins@WSJ.com and Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

January 22, 2020 00:35 ET (05:35 GMT)

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