By TechThop Team
Posted on: 27 Jul, 2022
The company's first commercial robotaxi service in San Francisco prompted a jump in expenses during the second quarter as Cruise began commercializing autonomous vehicles.
During the same quarter last year, Cruise's expenses were $332 million. There was an increase of $605 million in operating losses from $363 million last year to $605 million in the second quarter.
Kyle Vogt, CEO of Cruise, explained that the increase in cost can be attributed to an increase in headcount from ramping up its robotaxi service.
According to Vogt, Cruise will grow at an 'exponential' rate, according to its self-described 'aggressive' strategy. The company has previously said it will rely heavily on its purpose-built Origin AVs for growth.
However, with General Motors suffering a 40% profit drop due to semiconductor shortages and supply chain issues, it's difficult to see how Cruise will be able to overcome those issues and produce thousands of Origins in the next year as promised by former Cruise CEO Dan Ammann.
As Cruise expands, it is burning through cash, despite the availability of parts and semiconductors. As part of its autonomous delivery pilot with Walmart in Arizona, Cruise began mapping the streets of Dubai this week.
An aggressive growth strategy means more vehicles in more cities next year, even if the company has yet to announce new target cities. It might seem like a lot of cash right now, but Cruise has $1.8 billion in cash.
It is also important to point out that Cruise's operating expenses increased to $868 million in the first half of 2022 alone, and most of that money went towards launching a robotaxi service in a city with retrofitted Chevrolet Bolts.
As for Cruise's 2023 expenditures, executives from General Motors and Cruise declined to provide guidance, instead referring investors and analysts to Goldman Sachs' September conference.
GM CEO Mary Barra said, 'We will fund Cruise in a way that will allow us to gain market share and have a leadership position, and we have plans to take the costs out with technology maturation,' during GM earnings call on Tuesday. As well as the Origin, obviously.”
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