GM's former president is now running the self-driving-car company Cruise. He says it's time to move past the automobile.
- Former GM President Dan Ammann, now CEO of the self-driving-car company Cruise, wrote an extraordinary Medium post in which he argued that it's time to move past the automobile.
- Ammann wrote that Cruise offers the best alternative: All-electric, driverless, and available whenever customers require mobility.
- Cruise was bought by GM in 2016 for an all-in price of $1 billion; the now-standalone company has received subsequent investment from SoftBank and Honda and is now worth almost $20 billion.
- Cruise is currently testing its autonomous vehicles and ride-hailing technology.
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The automobile has been with us for over a century and has quite literally created fortunes.
But former GM President and now CEO of self-driving company Cruise says its time is over.
"To make order-of-magnitude - rather than incremental - improvements in
General Motors bought what was then called Cruise Automation in 2016, when the self-driving startup had fewer than two dozen employees. The No. 1 US automaker, relatively fresh off a 2009 bankruptcy but enjoying a booming business in SUV and pickup trucks sales amid a robust US recovery from the financial crisis, paid $1 billion, all in.
Cruise is now valued at almost $20 billion, after subsequent funding rounds from SoftBank, Honda, GM, and other institutional investors. (For comparison's sake, GM's current market cap is about $50 billion.)
An extraordinary statement about the future of mobility
To say that it's extraordinary for a longtime GM executive - Ammann joined GM in 2010 - who's now running the carmaker's most prominent effort to ensure its future to take a staunch position against the internal-combustion-powered, individually-owned automobile is an understatement. (Ammann became Cruise CEO in 2018, as cofounder Kyle Vogt shifted to being CTO)
"Imagine if someone invented a new transportation system and said, 'I've designed a new way of getting around: It's powered by fossil fuels that will pollute our air.'" Ammann wrote.
"'It will congest our cities to the point of inciting rage in its users. Its human operators will be fallible, killing 40,000 Americans - and more than a million people around the world - every year. Most of the time, the equipment will sit unused, occupying prime real estate and driving up housing costs. If you're young, old, or living with a disability, then you can't use it. And for those who can, the privilege will cost $9,000 a year and suck up two years of your life.'"
And then he offered the astonishing message: "You'd say, 'You're crazy.' And yet, here we are, living in a state of cognitive dissonance with exactly this - the human-driven, gasoline-powered, single-occupant car - as our primary mode of transportation."
Ammann went on to criticize the highly-touted, so-called disruptive alternatives to the automobile as, effectively, being more of the same. "Despite making up less than 1% of all vehicle miles traveled, ride-sharing has added further congestion, more emissions, and potentially even decreased safety in our cities from over-tired and overworked drivers," he wrote. Uber and Lyft, currently financially embattled on Wall Street after disappointing IPOs, aren't solutions.
Understandably, Ammann thinks Cruise is.
Preparing to launch
The company is now engaged in community outreach to prepare for a commercial rollout in the San Francisco Bay Area. Cruise has also intensified the pace of its testing, designed to prove its all-electric autonomous vehicles can operate safely, without drivers, in dense urban areas where the passengers are concentrated. That's the only way the business model works, scales, and can be adapted to other cities.
"Only then will we truly move beyond the car to the transportation system that we deserve - one that is safer, more affordable, and better for us, for our cities, and for our planet," Ammann wrote.
Cruise is a completely separate enterprise from GM at this point, but the carmaker is still spending about $1 billion a year to help Cruise maintain operations.
The irony here is that as GM continues to rack up billions in annual profits, selling large and pricey SUVs and pickups to an eager buyership, the company is moving full-speed-ahead under CEO Mary Barra to pursue an electrified future.
"We believe in the science of global warming," she said recently, when announcing that GM and South Korea's LG Chem would jointly build a $2.3-billion new battery factory in Ohio.
Ammann's views on the automobile, combined with Barra's vision for a GM that can survive for an other century, are the strongest indications yet that the carmaker giant and its bold self-driving undertaking don't intend to surrender the 21st-century to any newcomers.
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