General Motors’ (GM) Cruise is set to leverage ride-sharing service provider Uber’s (UBER) platform to offer its robotaxis starting next year. Cruise’s Chevrolet Bolt-based autonomous vehicles (AVs) will be offered for commercial trips to customers on Uber as part of a multi-year deal. The partnership means a big step for GM’s Cruise as it tries to make a comeback after several incidents and regulatory probes forced it to withdraw its robotaxis from the road. GM shares rose 1.5% in extended trading yesterday on the news.
GM’s Cruise Tries to Revive its Business
Uber already offers robotaxis on its platform in partnership with Alphabet’s (GOOGL) Waymo. Recently, Waymo hit a new weekly high milestone of offering over 100,000 paid trips per week. Waymo’s commercial success so far means that driverless taxis are truly viable. Once General Motors’ Cruise hits the roads again, it will have to ensure that major crashes like the one in San Francisco do not reoccur.
GM has already begun testing its robotaxis on U.S. roads with safety drivers on board. Cruise recalled 1,200 robotaxis yesterday for hard braking issues in a bid to end the long-standing National Highway Traffic Safety Administration (NHTSA) probe. Cruise has decided to stop production of its Cruise Origin robotaxi and instead focus on commercializing its Chevy Bolt AV. GM announced the decision during its Q2 FY24 earnings call, stating that the Origin had no steering wheel or pedals and could draw heightened regulatory scrutiny.
The robotaxi landscape is currently challenged with massive investments, enhanced safety standards, and strict regulatory scrutiny. Several companies are trying to get their hands on the yet nascent AV robotaxi market. Some of the notable ones include Amazon’s (AMZN) Zoox and Tesla’s (TSLA) soon-to-be-launched CyberCab. Meanwhile, Cruise plans to launch its own driverless robotaxi service and app, irrespective of its partnership with Uber.
What Is the Price Target for GM?
On TipRanks, the average General Motors price target of $57.50 implies 23.8% upside potential from current levels. Shares have gained 30.1% year-to-date. GM stock has a Moderate Buy consensus rating based on 11 Buys, two Holds, and two Sell recommendations.
Is Uber a Buy or Sell Right Now?
UBER stock commands a Strong Buy consensus rating based on 31 Buys and one Hold rating on TipRanks. The average Uber Technologies price target of $87.93 implies 19.9% upside potential from current levels. Year-to-date, UBER shares have gained 19.1%.
