GM Reportedly Tightens Purse Strings On Self-Driving Unit Cruise, Raising Concerns Over Long-Term Revenue
Portfolio Pulse from Anan Ashraf
General Motors Co (GM) is reportedly reducing funding for its self-driving unit, Cruise, following a pedestrian injury incident. This decision may impact GM's long-term revenue targets, which include income from self-driving technology. Cruise has faced safety concerns and regulatory challenges, leading to a suspension of operations. Despite a recent EBIT-adjusted loss, Cruise plans to relaunch operations in one city to rebuild trust and scale up gradually.
November 29, 2023 | 3:33 am
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GM's decision to cut funding for Cruise could negatively affect its long-term revenue goals and investor confidence, especially given the recent increase in EBIT-adjusted losses for the unit.
GM's reduction in funding for Cruise suggests a strategic shift that could delay the realization of revenue from autonomous driving technology. This, coupled with the recent EBIT-adjusted loss reported by Cruise, may lead to negative investor sentiment in the short term. The safety concerns and regulatory issues add to the uncertainty surrounding Cruise's contribution to GM's future earnings.
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