Innovation Culture: GM Scraps Origin, Waymo Doubles Down with $5 Billion

Two recent news items show how strongly innovation cultures can differ in companies and thus lay the foundation for a future or not.

In the first news item, GM has announced that it is scrapping the Cruise Origin and instead moving on to the next generation of Chevrolet Bolt robotaxis. The Cruise Origin were specifically designed, steering wheel-less vehicles in which passengers sit facing each other and drive autonomously.

The decision came nine months after an incident in which a pedestrian was hit by a Cruise robotaxi and Cruise subsequently lost its license to operate a robotaxi fleet. GM also wanted to reduce costs.

Kyle Vogt, the founder and former CEO of Cruise, expressed his incomprehension for this decision in a tweet.

Disappointed to see GM kill the Origin. Would have been amazing for cities.

GM repeatedly finds themselves with a 5-10 year head start, but then fumbles the ball, shuts things down, and loses the lead. Anyone remember the EV1?

It’s like someone keeps letting them look into a… pic.twitter.com/GDlL4KQk4S

— Kyle Vogt (@kvogt) July 23, 2024

Vogt’s reference to the EV1 is to an electric car that GM produced and leased in the early 2000s but then scrapped, despite huge protests from lessees. GM had thus given up a lead in electric vehicles and has not yet managed to regain any significant share of the electric car market. On the contrary, the company has struggled with production difficulties and quality issues, including with the Chevrolet Bolt.

In other news, Google has announced another up to $5 billion for the expansion and development of the Waymo Robotaxi fleet. Waymo Co-CEO Tekedra N Mawakana thanked the parent company Alphabet:

Alphabet has committed up to $5B to @Waymo. We are grateful for their immense vote of confidence in our team and recognizing the amazing progress we’ve made with our technology, product, and commercialization efforts.

— Tekedra N Mawakana (@TechTekedra) July 23, 2024

Waymo has been developing autonomous cars since 2009 and has invested billions in development since then. This means that the company is still the undisputed leader in autonomous driving.

This news also shows the different cultures of innovation and the environment in which the management boards of the two companies operate. While Waymo is taking a fresh look at mobility, GM is sticking to its old successful model. Waymo wants to create a new mobility service, while GM cannot imagine a model other than that of privately owned cars.

The board members also operate in completely different environments. At Waymo and its parent company Alphabet, for example, the two founders – i.e. entrepreneurs – are still actively involved on the board, while managers are now on the board at GM. The former generally have a longer time horizon, which is also acknowledged by investors. Managers, such as those at GM, on the other hand, are appointed for a period of, say, four years, during which they have to increase shareholder value and profits. The managers’ bonuses also depend on this. With a complex new technology such as autonomous driving, it is difficult to estimate when it will work and be profitable. Today’s managers are therefore primarily looking at the impact on the next few quarters. They don’t care whether my successor will be reaping the harvest in 8 years’ time, while today’s managers are penalized because of the costs and challenges.

Kyle Vogt points out the right problem here: GM had it back in their hands and once more dropped the ball.

This article was also published in German.