GM’s plan to deploy self-driving Cruise Origin on hold as feds weigh exemption request

General Motors' mission to get 5,000 self-driving Cruise Origin vehicles in cities nationwide hangs on whether federal regulators will grant the automaker's request to exempt the vehicle from federal safety standards.

GM plans to start building the Origin at Factory Zero in Detroit/Hamtramck this year but needs approval from the National Highway Traffic Safety Administration to put the vehicles on the roads. The Origin is a small bus-like vehicle that will transport up to six people without a driver. It operates through autonomous technology and has no manual steering controls or pedals.

"The Cruise Origin is on track to start production this year," said Aimee Ridella, GM spokeswoman. But she is careful to note, "pending government approval."

That government approval depends on how satisfactorily GM answers some big questions NHTSA is asking about the operational safety of the self-driving cars Cruise already has on roads now. In some cases, those cars have caused traffic backups and other public safety disruptions.

A regulatory framework is needed first

NHTSA regulates safety guideline standards to reduce auto crashes for regular motor vehicles but regulating autonomous vehicles is new for the organization. NHTSA's approval process for vehicles that do not have a human driver, such as the Cruise Origin, is required because current federal safety standards are written for cars that have a steering wheel and pedals. A delay in approval could delay GM putting Origins on the road and making money off them.

But no framework exists to guide NHTSA at the moment even though lawmakers such as U.S. Rep. Debbie Dingell, D-Ann Arbor, is pushing to get one in place so that companies such as Cruise can continue to make technological advancements that ensure safety, yet keep the U.S. competitive with other countries. China, for example, has made big investments in autonomous technology.

"There's a lot of confusion and uncertainty that's arisen out of this vacuum of employing self-driving vehicles nationwide and that's why it's important to set a framework for the rules of the road for autonomous vehicles," Dingell said.

Dingell wants to help get legislation in place that provides a framework to regulate autonomous vehicles because, she said, "I want these things built at Factory Zero because it means 2,000 union jobs. But we have to update the laws. Right now, current motor vehicle safety regulations require there be a driving wheel, accelerator and a brake, among other things. So what does the AV need? We need to update the motor vehicle standards.”

Dingell said her No. 1 priority is that those standards ensure that self-driving cars are safe.

What happens to Factory Zero jobs if NHTSA says no?

GM is asking NHTSA to make an exception and let it get its cars on the road and then even use the data from how they perform to help shape future regulations, according to a February 2022 blog post from Rob Grant, senior vice president, government affairs and social impact for Cruise.

As the majority owner of San Francisco-based Cruise, GM has been operating modified self-driving Bolts as a taxi service in San Francisco since June, when California regulators allowed Cruise to charge for rides during limited hours and locations. GM expects to eventually see revenue from collecting rider fees, particularly if the automaker can expand service.

But Cruise needs to expand its operations to other cities if it is to deliver on its goal of $1 billion in revenue by the end of 2025. The self-driving startup has been costing GM $1 billion to $2 billion a year in capital to operate.

So what happens if NHTSA denies GM's petition? GM can build the Origin, it just can't put them on roads, said Sam Abuelsamid, principal analyst for E-Mobility at Guidehouse Insights in Detroit.

"It’s not like you’ll lose a bunch of jobs in Detroit," Abuelsamid told the Free Press. "It’s more about the viability of the Cruise business as a whole. Cruise does not want to be deploying modified Bolts on a large scale, it’s not an efficient way to run the AV business. They want to expand and deploy their service in multiple locations and the best way to do that is with the Origin."

NHTSA is in no hurry

Abuelsamid said the volume of Origins that GM plans to build over the next few years is “pretty trivial compared to what they plan to build in trucks" at Factory Zero, which is why its impact on jobs is minimal. GM builds the GMC Hummer EV pickup, the GMC Hummer SUV and will soon start making the 2024 Silverado EV, all at Factory Zero.

That's a good thing because Abuelsamid said NHTSA is in no hurry to give its blessing to Cruise, or for that matter any other AV companies such as Veoneer's Zeus autonomous driving system or Tesla's full-self driving system, which a driver blamed for abruptly stopping his car and causing an eight-car pileup on the Bay Bridge in San Francisco last fall.

“They’re just taking a very slow approach to everything,” Abuelsamid said of NHTSA.

A NHTSA spokesperson declined to comment for this article because GM's request to NHTSA is still under consideration. But on Feb. 16, NHTSA did crack down on Tesla. It pressed the electric carmaker to recall nearly 363,000 vehicles with its “Full Self-Driving” system because of various road violations, according to AP.

Abuelsamid said he is "fairly confident" that Cruise's self-driving cars will pass the federal crash test standards, but he believes that NHTSA does not want "to rush approving any AVs" for exemption from safety standards "because they don’t understand the problems and how to regulate these systems."

How the Origin differs from the Bolt

Cruise has said its autonomous cars work and are safe. But the Origin, unlike the modified Bolt, will not have human controls such as a steering wheel and pedals. That's why GM petitioned NHTSA to grant it an exemption from federal vehicle safety standards.

Cruise is ready to proceed as planned and add 5,000 Origins to U.S. roads over the next few years.

“Pending approval of our petition ... it is ready to roll off the line at GM's Factory Zero in Detroit, where it will contribute to 2,200 union jobs," said Hannah Lindow, Cruise spokeswoman. "We look forward to working with NHTSA to ensure the safe and responsible deployment of this technology.”

But, in January, NHTSA sent a series of questions to GM asking the automaker to disclose the software and hardware used in the Origin, and the safety record and operational snafus experienced with the Bolt robo-taxis in San Francisco so far, specifically why a "cluster of 13 Cruise vehicles ... stopped in the same place. What remedies or software/hardware modifications has GM made to prevent this from occurring again?" NHTSA asked GM.

NHTSA also wants to know what kinds of testing GM is doing with the cars at higher speeds such as 60 mph and beyond and to document the risk differences at such speeds.

GM and Cruise are working to answer NHTSA, a person familiar with Cruise but not authorized to speak publicly about these specific issues told the Free Press. As to the 13 Cruise cars stopping, that was a technical issue which has been identified and resolved shortly after the incident occurred in June, the person familiar with Cruise said. Those 13 vehicles were recovered through a combination of remote assistance and manual retrieval, the person said.

San Francisco officials want to hit pause

In the meantime, some San Francisco officials want to apply the brakes on further expansion by Cruise, fearing that a larger fleet would exacerbate existing safety and traffic concerns.

In April, a self-driving Cruise car stopped in a travel lane, blocking a San Francisco Fire Department vehicle on its way to a three-alarm fire, according to a report in The Verge. Months later, a Cruise AV ran over a fire hose that was in use. There have been three incidents, according to The Verge report, of Cruise cars calling 911 about unresponsive passengers. When emergency services arrived, they found that the rider had merely fallen asleep.

One of the groups that wants a slower rollout of AVs is the San Francisco County Transit Authority (SFCTA).

"We share the hope that autonomous vehicles will someday improve street safety, access, and operational efficiency in San Francisco and elsewhere," Eric Young, spokesman for SFCTA, told the Free Press. "Based on our experience and observations, we are seeking assurances that autonomous vehicle companies have addressed the issues that caused their vehicles to obstruct traffic lanes and key intersections, and to demonstrate that their driverless vehicles can operate safely and reliably in San Francisco, before they are granted permission to expand their activities in our city."

Lindow defended Cruise, saying its safety record is publicly reported and includes millions of miles driven in a complex urban environment without any life-threatening injuries or fatalities.

"We’re proud that the overwhelming majority of public comments on our regulatory filings –– including from advocates in the disability community, small businesses and local community groups –– support expanding Cruise’s all-electric driverless service," Lindow said.

Lindow declined to comment on what Cruise or GM would do if NHTSA denies the petition.

Cruise's viability depends on expansion

In September, Cruise took more modified Bolt robotaxis to Phoenix and Austin, Texas, where it offers rides to limited passengers. Cruise's total fleet consists of about 300 self-driving Chevrolet Bolts across all three cities, Lindow said.

Cruise's fleet is a drop in the bucket when you consider there are about 30,000 Uber and Lyft vehicles in operation in San Francisco and about 100,000 in New York City, Abuelsamid said. Excluding taxis and other smaller players, the ride hail market in the United States was about a $45 billion industry as of last year, he said.

That's why building those 5,000 Origins at Factory Zero and getting them on the road is key to Cruise reaching its publicly stated revenue target, Abuelsamid said. And, he said, while hitting $1 billion in revenue is certainly doable, it will likely be nowhere near profitability.

"It’s hard to say how much they might lose in 2025, but the number is almost definitely going to be bigger than that revenue number," Abuelsamid said.

In his math, if Cruise charges the same fares as Uber and Lyft, which is about $2.50 a mile, it needs about 400 million miles with passengers paying that fare to hit $1 billion. To do that will require about 5,500 robotaxis, he said.

"If you conservatively say, 'We’ll put 500 vehicles in each city we operate in,' that’s 10 to 11 cities. Right now they’re in three with about a couple hundred Bolts," Abuelsamid said, adding that expansion to 10 cities by the end of 2025 "is not unreasonable."

He added, "They’ll do whatever it takes to get that approval from NHTSA and it’ll happen eventually. I think, it’s just a matter of time."

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.