For those still hoping for the self-driving car to get you home after a long night of drinking, well, stop looking for it from automaker General Motors (GM). The Cruise Origin has been delayed, and “indefinitely,” so that hope is gone for some time to come. Shares plunged nearly 7% as investors took the news badly.
The Origin autonomous vehicle’s development has been indefinitely delayed due to several key factors, based on word from the company. High costs were part of the problem, as well as issues of “regulatory uncertainty” that suggested that, even if they’d managed to get the thing to work, it might not actually be allowed to work on any roadways. This was especially true given that the vehicle had no manual controls at all, which even Tesla (TSLA) includes with its auto-driving systems.
It didn’t help matters that third-party probes found several key problems with the Cruise’s development plan, including “…culture issues, ineptitude, and poor leadership.”
Delayed but Not Out
Reports noted that GM will put all that development capability back into the Chevrolet Bolt, which the automaker suggests might provide an alternate path to development for the Cruise. It also allows GM to push off any potential regulatory issues into the future, when more business-friendly administrations may be in place.
And the Cruise won’t be out altogether; the autonomous taxi service version of the Cruise is coming back. It won’t be in play in San Francisco, where it’s still under government investigation, but Dallas, Houston, and Phoenix will be in line to have the service. However, this time around, the cruises will be “supervised” by human drivers who can intervene in their operation as needed, which will hopefully prevent any more injuries.
Is GM a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 11 Buys, three holds, and one Sell assigned in the past three months, as indicated by the graphic below. After an 18.89% rally in its share price over the past year, the average GM price target of $55.54 per share implies 19.36% upside potential.
