General Motors Company GM backed Cruise offered tough competition to Alphabet Inc GOOG GOOGL Google in the race to secure the first robotaxi permit for San Francisco, the Financial Times reports.
Cruise beat Google by offering free rides in its fully autonomous vehicles in February. Cruise also bagged approval for monetizing the rides in early June.
Cruise chief Kyle Vogt said, "If this can operate in a major U.S. city, like San Francisco, where there's a high willingness to pay, high population density, high demand, high complexity, then it can operate in many places."
GM banked on the 3,000-strong Cruise team to build driverless tech for personal vehicles by mid-decade.
Google's Waymo has been operating a more extensive robotaxi service in suburban Phoenix, Arizona, since 2020. However, Waymo failed to expand in other, more complex cities despite testing for years in San Francisco.
In 2021, GM disclosed "rapid scaling" phase for Cruise would start in 2023, leaving behind the likes of Tesla, Inc TSLA.
GM chief Mary Barra expected Cruise to grow from zero to $50 billion in revenue by the decade's end.
In 2023, Cruise looks to deploy the Origin, a purpose-built robotaxi with no steering wheel or pedals, in Dubai. However, Vogt acknowledged bottlenecks, including manufacturing, mapping, and having the infrastructure to operate and clean the vehicles across countless cities.
In 2021, Cruise's valuation crossed over $30 billion, matching Waymo's, when Microsoft Corp MSFT declared serving as both partner and investor alongside Honda Motor Company, Ltd HMC and Walmart Inc WMT.
UBS cited Cruise as a "key" reason behind its Buy rating on the shares of GM, whose own valuation is just above $50 billion.
Wolfe Research saw that no other AV company is at this development phase or aiming for this kind of scale in this timeframe.
Price Action: GM shares traded higher by 1.27% at $31.82 in the premarket on the last check Friday.
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