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• GM has bowed out of the robotaxi race for now, halting its investment in Cruise.
• Only a few companies have made significant strides in the autonomous taxi space.
• Tesla and Waymo are the two frontrunners due to the progress they've made with self-driving.

General Motors' white flag in the robotaxi race on Tuesday just made the autonomous ride-sharing competition much smaller in the US, showing how challenging it can be for companies, even with the capital, to compete if they haven't already made significant headway in autonomy.

Eight years and more than $10 billion in investment later, GM said that the resource-intensive nature of Cruise and an increasingly competitive market has pushed the company to shift away from its robotaxi dreams. The company said in a statement that GM will be focusing on building up its advanced driver assistance systems for "personal vehicles."

The decision was seen by many analysts as an implicit ceding of the robotaxi race to a few companies who are already far ahead in the game, namely Tesla and Waymo.

"We believe GM's move also potentially implies that other companies (Tesla & Waymo) have better tech and/or that the market may not be appealing for later entrants," BofA analyst John Murphy wrote in a note. "Waymo is already offering a robotaxi service across several US cities and Tesla plans to launch its service in 2025."

While Chinese companies continue to make strides in autonomous ride-sharing services, including Baidu's Apollo, Gene Munster, managing partner of Deepwater Asset Management, told Business Insider that he believes autonomous vehicles in the western world will be "powered by two or three companies."

Part of the reason is because delivering robotaxis requires solving the autonomous driving equation and only a few companies like Tesla, Waymo, and Amazon have the resources — and shown the goods, to varying degrees — to do so, Munster said.

"We look at 2,000 companies a year that are cutting-edge tech companies, and we never see anybody trying to solve for autonomy," said Munster, who follows the autonomous vehicle industry. "The reason why is that this ship has basically sailed. It's going to be one of those three."

That GM has decided to pull back its Cruise operations is not an indictment against the business opportunity robotaxis itself presents — GM likely made a prudent move to shift its priorities, Tom Narayan of RBC Capital Markets wrote in an analyst note.

Safety incidents involving Cruise's fleet however kept putting the company at odds with regulators.

The company was stripped of its permit to operate in California after a woman was dragged underneath one of its vehicles last October, essentially paving a clear path for Waymo to get ahead of GM in the state.

Waymo began offering ride-sharing services to a few major cities this year and announced plans to expand to the Miami public in 2026. As of October, the Alphabet-owned company said it now provides more than 100,000 paid rides per week.

A Waymo spokesperson declined to provide comment.

Amazon's Zoox is gearing up to offer public rides in Las Vegas and San Francisco in 2025, differentiating itself from competitors through its unique carriage-style vehicles that don't come with a steering wheel. The company also recently hired a key Tesla autopilot executive.

Tesla has yet to provide commercial rides through its recently debuted Cybercab, but analysts are giddy about the company's timeline. CEO Elon Musk said during an earnings call in October that a $25,000 Cybercab will reach volume production by 2026.

Munster noted another advantage Tesla has is its potential to scale autonomous services, given that there are millions of Tesla vehicles on the road today. Those vehicles also provide large amounts of data to help Tesla fine-tune its Full Self-Driving feature.

"My sense is that this is a big data, large language model type of problem," Munster said. "I think that the advantages that Tesla will gain in data will outpace the disadvantage that they have in hardware."

Representatives for Zoox and Tesla did not respond to a request for comment.

Zoox co-founder and CTO Jesse Levinson told the crowd at TechCrunch Disrupt 2024 that he didn’t think Tesla would launch a robotaxi ride-hailing service in California (or anywhere else) next year, despite what Elon Musk had claimed. The “fundamental issue is they don’t have technology that works,” he said at the time. But it seems that […]

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• Tesla's director of engineering for Autopilot has left the company for robotaxi rival Zoox.
• Zheng Gao becomes the latest senior employee to leave the automaker in a tumultuous year for Tesla.
• Elon Musk laid off over 10% of the company in April and is trying to pivot Tesla toward autonomous vehicles.

Tesla's executive exodus is showing no signs of slowing down.

Zheng Gao, Tesla's director of engineering for Autopilot hardware and an eight-year veteran at the Elon Musk-run automaker is departing for rival robotaxi builder Zoox, the Amazon-backed company announced on Wednesday.

Gao, who led hardware design for Tesla's Autopilot assisted-driving system, is the latest senior employee to leave the company.

Four of CEO Elon Musk's direct reports previously announced their departures the week before Musk unveiled Tesla's Cybercab robotaxi in a glitzy Los Angeles event.

Those departures included Tesla's global vehicle automation and safety policy lead, Marc Van Impe, and Chief Information Officer Nagesh Saldi.

Musk has lost at least eight of his direct reports at the company this year.

The billionaire has radically overhauled Tesla in 2024, cutting more than 10% of its global workforce in April.

Senior Vice President Drew Baglino and Rebecca Tinucci, the head of Tesla's supercharging division, left around the time of those layoffs.

The departures have come as Musk increasingly pivots the company toward autonomous vehicles.

The Tesla chief has said the automaker hopes to have fully self-driving vehicles on the road in California and Texas next year, and is planning to begin mass producing the self-driving Cybercab, which has no steering wheel or pedals, by 2027.

Experts have warned that Tesla faces an uphill struggle to make Musk's robotaxi dreams a reality, and the company faces competition from fellow robotaxi firms Waymo and Zoox.

Google-backed Waymo says its fleet of driverless Jaguar I-Paces is now doing 150,000 paid rides a week. At the same time, Zoox, which was acquired by Amazon for $1.2 billion in 2020, has begun rolling out its toaster-shaped robotaxi in San Francisco and Las Vegas.

Tesla did not respond to a request for comment, sent outside normal US working hours.

Do you work at Tesla or have any information to share? Get in touch with this reporter via email at [email protected].