General Motors to Reel in Spending on Cruise as Self-Driving Tests Hit Pause

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General Motors ($NYSE:GM) is a leading automotive manufacturer based in Detroit, Michigan. Recently, General Motors has made the decision to reduce their outlay on Cruise, their subsidiary focused on self-driving technology, as a result of suspending their self-driving tests. As the global landscape of autonomous vehicles continues to expand, GM remains an industry leader in the space. Through Cruise, they have dedicated substantial resources to developing autonomous vehicles and are one of few companies to have actual vehicles driving on public roads.

However, after a fatal crash in Arizona involving an Uber vehicle, GM decided to suspend their self-driving tests to review safety protocols. This led to the decision to reduce their outlay on Cruise, in order to cut back on unnecessary spending. As the future of self-driving cars continues to unfold, General Motors will remain a major player in the space. Despite deciding to reel in spending on Cruise, they continue to work closely with their partners to ensure they remain at the forefront of autonomous vehicle technology. This decision is just a minor setback in their long-term progress towards achieving their goal of bringing fully autonomous vehicles to the public.

Stock Price

On Tuesday, General Motors (GM) stock opened at $28.4 and closed at $28.9, up by 1.4% from its prior closing price of $28.5. This follows the news that the company is reducing its spending on Cruise, its self-driving car division, as tests for the technology have been put on pause. The slowdown in GM’s spending on the self-driving car division is in response to the pandemic, which has forced many of GM’s operations to decrease in order to conserve cash. GM has previously invested $1 billion in Cruise, which is one of the most established self-driving companies in the industry.

The decrease in spending has not had a significant impact on the share price, with investors likely confident in GM’s ability to weather the storm and continue making progress with its autonomous vehicle technology. Despite the pause in testing, GM is still actively developing and researching new technologies for its Cruise division. Overall, GM’s decision to reduce spending on Cruise while tests are on pause is a prudent move that will help the company conserve cash while ensuring that it remains competitive in the self-driving car space. Live Quote…

About the Company

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Analysis

GoodWhale has conducted an in-depth analysis of GENERAL MOTORS‘s wellbeing. From the Star Chart, it is clear that the company is particularly strong in terms of dividend, and medium in terms of asset, growth, and profitability. Its intermediate health score of 6/10 suggests that it might be able to sustain future operations in times of crisis. As a result, we have classified GENERAL MOTORS as a ‘cheetah’ – a type of company that has achieved high revenue or earnings growth despite lower profitability. This type of company may be of interest to investors looking for quick growth and a potential return. However, there is also a greater risk associated with such investments as the company may not be as financially robust as other more established counterparts. Investors should therefore thoroughly assess GENERAL MOTORS before making an investment decision. More…

Peers

General Motors Co, Stellantis NV, Toyota Motor Corp, and Ford Motor Co are all leading automobile manufacturers. They each have their own unique history and strengths, but they are all competitive in the market today.

– Stellantis NV ($NYSE:STLA)

Stellantis NV is a holding company that was created in 2021 through the merger of Fiat Chrysler Automobiles and Groupe PSA. The company is headquartered in the Netherlands and is majority owned by the French automaker Groupe PSA. Stellantis is the fourth-largest automaker in the world by sales, with a portfolio of 14 brands that include Fiat, Chrysler, Jeep, Dodge, Ram, Alfa Romeo, Lancia, Maserati, Peugeot, Citroën, DS, Opel, and Vauxhall.

– Toyota Motor Corp ($TSE:7203)

Toyota Motor Corp is a Japanese multinational corporation that manufactures vehicles. It has a market cap of 27.43T as of 2022 and a Return on Equity of 11.32%. The company produces vehicles under five brands, including Toyota, Lexus, Daihatsu, and Hino.

– Ford Motor Co ($NYSE:F)

Founded in 1903, Ford Motor Company is an American multinational automaker that has its main headquarters in Dearborn, Michigan. The company sells automobiles and commercial vehicles under the Ford brand and most luxury cars under the Lincoln brand. Ford also owns Brazilian SUV manufacturer Troller, an 8% stake in Aston Martin of the United Kingdom, and a 49% stake in Jiangling Motors of China. It also has joint-ventures in China, Taiwan, Thailand, Turkey, and Russia. The company is listed on the New York Stock Exchange and is controlled by the Ford family; they have minority ownership but the majority of the voting power.

As of 2022, Ford Motor Company’s market capitalization is $47.32 billion, and it has a return on equity of 23.7%. The company’s main business is the manufacture and sale of automobiles and light trucks. In addition to its core automotive business, Ford also operates in the financial services sector through its Ford Motor Credit Company subsidiary.

Summary

General Motors (GM) is a leading US car manufacturer, and investors have been watching its progress with its self-driving arm, Cruise. Recently, GM has announced that it will be reining in spending on Cruise, due to their pause in self-driving testing. This has raised concerns among investors, as the company has been investing heavily in the technology and counting on its success for future growth. Despite this, GM remains a strong company with a long history of success, and many investors are confident that the company will be able to weather the current storm and come out of it stronger than ever.