GM’s cruise expands into Tesla’s backyard.
Cruise
- Cruise launches in Houston and Dallas.
- The robotaxi service began testing in Austin late last year.
- Cruise’s expansion is the latest blow to Tesla as it relies more on range to generate profits.
Startup Robotaxi Cruise is gearing up to take up more space in Tesla’s backyard.
Kyle Vogt, CEO of the General Motors-backed self-driving vehicle startup, tweeted this week that Cruise would begin supervised self-driving in Houston within days, followed by an expansion to Dallas. After the test period, Cruise plans to give customers access to driverless rides.
The Texas expansion comes after an initial launch in Austin late last year and a full rollout of its 24-hour service in San Francisco earlier this year.
Tesla has also expanded its presence in Texas in recent years, opening the Austin gigafactory in 2021. The company plans to build the Cybertruck there later this year.
As Cruise continues to expand its driverless offerings, Tesla is struggling to provide fully driverless cars to customers. The company’s rollout of its more advanced driver assistance software, known as ‘Full Self Driving’ (FSD), has been marred by crash reports and a sweeping recall of all equipped Teslas. from FSD earlier this year.
Tesla relies on autonomy to make up for lost margins
After a series of price cuts slashed Tesla’s first-quarter profits, CEO Elon Musk told investors the company had a plan to recoup its high profit margins: sell more autonomous features.
“We think we’re laying the groundwork here, and it’s better to ship a lot of cars with a lower margin, and then harvest that margin in the future as we let’s perfect autonomy,” Musk said on an earnings call last month.
While Tesla is betting its future on autonomy, Cruise is just the latest company to beat Tesla in rolling out the technology. Outside of robotaxi services like Cruise, other companies have moved faster to improve beyond a Level 2 hands-free driving system.
Mercedes-Benz was the first company to receive certification for Level 3 driving automation earlier this year, a worrying sign for Teslas as it battles to retain its title as an industry disruptor.
