Cruise to launch robotaxi services in Austin, Phoenix before end of 2022

GM’s self-driving technology unit Cruise will launch commercial robotaxi services in Austin, Texas and Phoenix — two hot spots for autonomous vehicle development — “in the next 90 days and before the end of 2022,” Cruise CEO and co-founder Kyle Vogt said Monday,

The services will initially be small scale, but from the outset the robotaxi services will be driverless, a term that means a human safety operator will not be behind the wheel, Vogt said during a speech at Goldman Sachs’s Communacopia and Technology Conference. Operations will scale next year, he added. Initial rides may be free with the intent to begin charging for the service shortly after.

“In Phoenix we’re building off the partnership we have with Walmart, which is an investor and partner in Cruise,” said Vogt, referring to Cruise’s delivery pilot with the retail giant in Arizona. “And as of a few weeks ago, actually a few days ago, we got all the permits necessary for commercial ride-hail and delivery operations in Phoenix. So that business is really getting going.”

While Cruise has already mapped and driven the streets of Phoenix, the company is coming to Austin without any experience in the city. Cruise doesn’t have infrastructure or operations in Austin and has not mapped the city, Vogt said.

Cruise is betting that its work in San Francisco, where it has a robotaxi service that operates in certain areas of the city between 10 p.m. and 5:30 a.m., will allow it to expand to new cities more quickly.

Cruise’s decision to launch in Phoenix and Austin this year pulls the company’s geographic scaling schedule forward by six months, said Vogt, who noted that it only took three weeks for Cruise to get all the permits it needed for its next cities. By contrast, it took the company 33 months to get all the permits it needed for commercial operations in California, where Cruise has been operating a commercial robotaxi service in San Francisco since June.

“I think along the way we built a lot of credibility and trust,” said Vogt.

It also puts Cruise in two cities that already have an AV presence. Waymo has operated in the suburbs of Phoenix for years and has recently expanded to downtown. Argo AI, which is backed by GM rival Ford and VW Group, is actively testing and has pilots with commercial partners underway in Austin.

Cruise has claimed that it will scale rapidly and aggressively across the country, a sentiment that Vogt reiterated Monday. The executive also said Cruise and GM would start ramping up manufacturing of Cruise’s purpose-built AV, the Origin, in order to supply new markets.

“Looking at 2023, next year, things get really interesting on the growth side,” said Vogt.There’s gonna be thousands of AVs rolling out of the General Motors plant, including the first Origins. We’ll be using those to light up many more markets and to start to generate meaningful revenue in those markets.”

By 2025, Cruise expects to hit $1 billion in annual revenue, according to Vogt. The company closed out the second quarter of 2022 with $25 million after launching its commercial service in San Francisco. The company’s expenses increased $550 million, up from $332 million in the same quarter of last year, and its operating expenses almost doubled at $605 million.

The increased spending is expected to continue as the company builds vehicles and expands into new markets, but Vogt said Cruise has a strategy to keep costs down as it grows. For example, the company has built robots to charge and clean its AVs, and Cruise has been building custom chips that can reduce power consumption and system costs.

While Vogt continuously said that the company’s technology is where it should be for growth into new markets — even markets that Cruise hasn’t mapped yet — Cruise recently reported a software recall and update in 80 of its robotaxis following a minor crash in June in which two riders were injured.

In addition to laying out Cruise’s plans to scale its robotaxi service, Vogt also nodded toward the possibility of producing consumer autonomous vehicles by 2025. He also hinted that we’d start to see Cruise technology appear in “some exciting new ways.”