General Motors (NYSE:GM)-backed self-driving unit Cruise has decided to stop all operations of its driverless robotaxis in the U.S. On Thursday, Cruise said that it will suspend operating its autonomous driverless vehicles in Austin, Phoenix, Houston, Dallas, and Miami following the ban on its operations in California. However, Cruise’s robotaxis with a “safety driver” behind the wheel will continue to operate in the nation.
The California Department of Motor Vehicles (DMV) noted that Cruise’s driverless fleet posed “an unreasonable risk to public safety” and called them risky for pedestrians. Following the DMV’s order, the National Highway Traffic Safety Administration (NHTSA) said yesterday that it is investigating five more incidents where driverless autos braked inappropriately, causing collisions with other vehicles. The regulator is seeking additional information on the same by November 3.
Cruise is cooperating with all ongoing investigations and halted its operations, citing that rebuilding the public’s trust is its prime motive at the moment. Moreover, the company is undertaking a review of its “processes, systems, and tools” to improvise them. Overall, the Cruise unit appears to have become a pricey bet for GM, with widening losses and no material benefits in sight.
Is GM a Buy, Sell, or Trade?
Analysts remain cautiously optimistic about GM stock. Yesterday, DZ Bank AG analyst Matthias Volkert cut the price target on GM to $43 (50.6% upside) from $52 but maintained a Buy rating.
On TipRanks, GM has a Moderate Buy consensus rating based on ten Buys, six Holds, and one Sell rating. Also, the average General Motors price target of $47.82 implies 67.5% upside potential from current levels. Meanwhile, GM stock has lost 14.9%.
