Cruise Announces Expansion To Phoenix And Austin And More Plans

Kyle Vogt, CEO of GM’s “Cruise” unit announced today that within 90 days, Cruise would start robotaxi service — paid, and with no safety driver as in San Francisco — in Phoenix and Austin. Cruise also announced ambitious expansion plans to quickly move to other cities, deploy their custom Origin vehicle and by 2025 to have cars for consumers and revenues of over $1 billion.

Vogt is proud of what Cruise has done so far and with customer response and says that the new question will be “is my city next?” They have actually moved their shipment calendar 6 months earlier than their initial plan.

A few notable details:

• Cruise did all the permits for Phoenix in just 3 weeks (compared to 22 months in San Francisco.)
• Cruise went from never having worked in Austin to being ready to roll in 90 days, and feels it can expand to other cities just as quickly.
• Their latest mapping system is more tolerant of map errors, and maps are kept up to date by vehicles driving the roads and recording changes. They anticipate mapping to be low cost and very scalable.
• Cruise is developing custom silicon for its vehicles that will be ready in 2025 to offer lower cost and lower wattage. These will go in both the Origin and vehicles which will be for sale to private individuals by 2025.
• Vogt anticipates over a billion in revenues from rides and vehicle sales in 2025. He believes that as part of GM, the problem of scaling up vehicle manufacturing is a solved problem for them, but not for many other teams.
• Cruise anticipates a robotaxi ride cost under $2/mile will explode the demand and available market to scale up that business.
• Cruise has also built robots to clean robotaxis and to plug them in to charging to lower the cost of operations.
• The Origin will have a million-mile lifetime, close to 5 times the life of typical ICE cars. It has been designed for easy cleaning and maintenance.
• Cruise will partner with WalmartWMT
  in Phoenix for deliveries as well as their commercial operations and robotaxi.
• Vogt revealed Cruise now has 300,000 miles for their service in San Francisco.

Vogt believes that we’re in the trough of disappointment of the hype cycle and the pessimism seen by some is incorrect — that the time of growth and realization is here.

The Cruise plan is ambitious, particularly the sale of personal vehicles. Personal vehicles need to drive over a very wide area to be sold, since you won’t sell a vehicle that only works in a subset of towns, while a robotaxi can be just fine that way. You also get less control over the vehicle. As such the robotaxi goal is much less of a stretch.

MobilEye has also demonstrated their ability to quickly map and deploy in new cities. One of the bigger barriers to deployment may simply be capital and team bandwidth.

The use of cleaning robots is notable. While most of the costs of a robotaxi are similar to the costs of a car (about 50 cents/mile today) there is a problem when robotaxis need cleaning, because they don’t have a driver in them to do the job the way a regular taxi does. The taxis will need to take some time to travel to depots, but the cost of the cleaning by robot should be low.

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