General Motors (NYSE:GM) is taking a cautious approach to reviving its self-driving car unit, Cruise. The company is relaunching its operations in Phoenix, Arizona, but with a twist – human drivers will be behind the wheel. The move follows the October 2023 suspension of Cruise’s license after a pedestrian was seriously injured by one of its self-driving vehicles.
With this strategic move, the company aims to gather crucial data on Phoenix’s road infrastructure, including speed limits, stop signs, and traffic signals. This data will be used to train and refine Cruise’s autonomous driving systems. GM hopes that this move should set the stage for a gradual return to fully driverless operations.
The road to relaunch has been far from smooth. The suspension by the California Department of Motor Vehicles (DMV) triggered a domino effect for Cruise. Soon after the accident occurred, the company faced investigations by state and federal regulators, which raised concerns over its technology and safety protocols. Furthermore, the company underwent significant restructuring, including layoffs and executive departures.
Is GM a Good Stock to Buy?
During the operational pause, the company said it ensured continuous retraining and improvement of the autonomous system. However, Cruise is facing rising competition from Alphabet’s (GOOGL) self-driving startup, Waymo, which has partnered with Uber Technologies (UBER) to provide driverless ride-hailing services in Phoenix.
On TipRanks, General Motors has a Moderate Buy consensus rating based on 12 Buys, six Holds, and one Sell. The analysts’ average price target on GM stock of $51.17 implies a 14.4% upside potential. The stock is up nearly 25% so far this year.
