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GM’s decision to no longer fund its self-driving car subsidiary Cruise was a surprise to many — and got me thinking about this startup that I’ve come to know over the years.
About nine years ago, I learned about a startup called Cruise Automation. The San Francisco-based startup, co-founded by Kyle Vogt and Dan Kan in 2013, had just shifted its business plan away from developing direct-to-consumer kits to retrofit vehicles and instead turned its attention and efforts to self-driving software.
The autonomous vehicle world was a small and dynamic place back in 2015. Cruise had a few dozen employees, and Waymo didn’t even exist yet, as it was still described as the Google self-driving project. The people who would go on to found Aurora, Nuro, and Argo AI were still at other companies, namely Google. Zoox had just been founded the year before.
The hype had not engulfed the industry yet. But that would come soon enough, and for me, the moment that really kicked it off was March 2016 when GM acquired Cruise for $1 billion, a story that Dan Primack and I broke when we both still worked at Fortune.
There is too much history to share in this shortish newsletter, but it’s safe to say that autonomous vehicle technology was on the minds of automaker executives everywhere, and startup founders working on the tech were suddenly the darlings of the VC world. (I see a lot of parallels with what’s going on with AI now, but at an even larger scale.)
Fast-forward through the wave of consolidation and numerous failed startups, and by 2023 just a few well-funded giants remained, including GM’s Cruise, Alphabet’s Waymo, Hyundai-backed Motional, and Amazon-owned Zoox. In August 2023, Cruise finally received the last permit required to operate commercially in San Francisco. Hopes were high when I interviewed Vogt at Disrupt 2023, even as criticism over the robotaxis began ramping up.
Everything changed on October 2 after an incident left a pedestrian stuck under and then dragged by one of its robotaxis. By the end of the year, Vogt had resigned, 24% of Cruise’s workforce had been laid off, regulators had suspended its permit, and the company decided to cease operations elsewhere.
Recent moves by GM suggested that Cruise would return — albeit as a leaner, more tightly controlled enterprise. But GM chairman and CEO Mary Barra has different plans for Cruise.
This story will be ongoing; there is much to dig into. But some of our initial articles cover GM’s decision, how Cruise employees learned about the change (the term “blindsided” was used), the financial effect on Microsoft, and Honda’s logical move to cut funding to a joint program in Japan.
Stay tuned. And now on to other news.
A little bird
A little bird dropped an aviation tidbit regarding Hyundai’s urban air mobility startup, Supernal, that we were able to confirm with the company.
The gist: Supernal is shifting global headquarters from Washington, D.C., to Irvine and is asking around three dozen of its workers to relocate. While that number represents only about 5% of its total workforce, it appears to account for the majority of workers located in Washington, according to data from LinkedIn and a source who spoke to TechCrunch on the condition of anonymity.
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Deals!
Investors still seem keen to throw money into future-of-flight SPACs.
Take Archer Aviation and Joby Aviation, two companies that went public via mergers with special acquisition companies.
Archer raised $430 million from existing and new institutional investors to fund a new business unit dedicated to building aircraft for defense applications. In an interesting twist, part of that is going toward an exclusive partnership with Anduril to build a hybrid VTOL.
Meanwhile, Joby launched a public offering to sell up to $300 million of its shares of common stock. That shouldn’t be confused with the $222 million Joby raised in October from underwriters. This latest filing adds to that offering and would give Joby the chance to raise a total of $522 million as it gears up to launch commercially in 2025.
Other deals that got my attention …
Nikola, a producer of battery and hydrogen-electric trucks, has taken several steps to repay its debts and raise equity, including offering up to $100 million in a common stock sale.
WeaveGrid, a San Francisco-based startup that’s developed EV charging software, raised $28 million in a round led by Toyota’s Woven Capital. Existing investors Activate Capital, Collab Fund, Emerson Collective, and Salesforce Ventures participated, with debt provided by HSBC Innovation Banking.
Notable reads and other tidbits
Autonomous vehicles
San Francisco is the most prepared city for new transportation technologies like AI, autonomous vehicles, and air taxis, according to a new urban mobility readiness index.
Uber and WeRide launched a robotaxi service in Abu Dhabi.
Electric vehicles, charging, & batteries
Fisker resolved another federal safety investigation, this time over the risk that its Ocean SUVs roll away unexpectedly.
You might recall an article I wrote in 2022 about Lightship, a startup building an all-electric travel trailer. Welp, the company has officially launched its production model, the AE.1 Cosmos Edition, formerly known as Lightship L1. The company plans to make only 50 units, which will cost $250,000. Three additional trim levels are expected in the future.
The Lucid Gravity SUV is officially in production at the company’s Casa Grande, Arizona, factory and nabbed an estimated EPA range of 450 miles.
Rivian’s EVs ranked last on Consumer Reports’ reliability list.
Random transpo stuff!
Amazon expanded into online car sales with the launch of Amazon Autos, an e-commerce business that lets customers find, order, and buy new cars, trucks, and SUVs from dealerships.
Salvatore Palella has resigned as CEO and director of the board at Micromobility.com, the startup formerly known as Helbiz that has been careening toward bankruptcy for some time. Strangely, Palella’s holding company is taking on all of the company’s debt, according to a regulatory filing.
Spotify officially discontinued Car Thing, its in-car streaming device, with all units now disabled.
Uber has 30 days to require certain drivers to get fingerprinted if the ride-hail giant intends to continue transporting unaccompanied teens in California, per a ruling from the state’s Public Utilities Commission.
This week’s wheels
This newsletter is too long this week, don’t ya think? This week’s wheels will return next week!
What is “This week’s wheels”? It’s a chance to learn about the different transportation products we’re testing, whether it’s an electric or hybrid car, an e-bike or even a ride in an autonomous vehicle. Future vehicles include the Lucid Air, more time in the next-gen Rivian R1S, and the Volkswagen ID Buzz. Stay tuned.
