General Motors’ (NYSE:GM) self-driving car subsidiary, Cruise, cut 50% of its active robotaxi fleet in the busy streets of San Francisco following several “concerning incidents” during the past week. The reduction notice was issued on August 18 by the California Department of Motor Vehicles (DMV), which is currently investigating the situation. Until Cruise takes appropriate actions to increase road safety, it will operate only 50 robotaxis during the day and 150 during the night. Cruise is fully cooperating with the ongoing investigations.
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Cruise Robotaxis Encounter Multiple Accidents
Last Thursday, one of Cruise’s autonomous driving vehicles carrying a passenger bumped into an emergency firetruck, which was apparently driving in the wrong lane to jump the traffic lights. The robotaxi did apply brakes to reduce speed but could not avoid the collision, Cruise said. GM also clarified that its Cruise robotaxis have skillfully navigated encounters with emergency vehicles on earlier occasions.
Similarly, another Cruise driverless vehicle stalled at an intersection, and another with a passenger onboard was hit by a driver. Moreover, several Cruise robotaxis slowed down outside an outdoor music festival and created chaos. If the DMV inquiry reveals significant problems on the part of the firm, Cruise’s robotaxi service in the city may be completely stopped.
The DMV is responsible for the testing and licensing of autonomous vehicles and also has the authority to withdraw permits if required. Its primary concern is the safety of the passengers that ride aboard these driverless vehicles as well as the potential risk to the public at large. Cruise’s issues come just a week after the California Public Utilities Commission gave the green light to both Cruise and Alphabet’s (NASDAQ:GOOGL) Waymo to expand their driverless fleet in San Francisco, with the approval to carry passengers 24 hours a day.
Many residents and the local populace of San Francisco are also against the use of robotaxis, as they are considered dangerous and interfere with first responders. Meanwhile, some proponents say autonomous vehicles are cheaper alternatives and help make traveling easier.
Is GM a Buy or a Sell, as per Analysts?
Of the nine Top Analysts who recently rated General Motors stock, five have assigned it a Buy while four have given it a Hold rating. Top Wall Street analysts are those awarded higher stars by TipRanks Star Ranking System. This is based on an analyst’s success rate, average return per rating, and statistical significance (number of ratings).
Based on the views of these top analysts, GM stock has a Moderate Buy consensus rating. On TipRanks, the average General Motors price forecast of $50.44 implies an impressive 52.3% upside potential from current levels. Meanwhile, GM stock has lost 1.6% so far this year.
