Financial Times reported that automobile major General Motors (NYSE:GM) will slash spending on its Cruise self-driving unit. This was after an injury occurred to a pedestrian last month that resulted in the company suspending its testing.
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The report stated that GM will outline the extent of the spending cut at its Investor Day on Wednesday. For reference, the firm usually spends $700 million on its self-driving unit on a quarterly basis. In addition, its self-driving cars are already operational in certain U.S. cities, including San Francisco as a taxi service.
A delay in Cruise timelines is likely to affect GM’s revenue goals over the long term, set at $80 billion by 2030, which relies on revenues from its self-driving technology and software. Cruise halted its self-driving operations in California back in October after Californian regulators banned the vehicles.
Is GM a Good Stock to Buy?
Analysts remain cautiously optimistic about GM stock, with a Moderate Buy consensus rating based on 11 Buys, five Holds, and one Sell. Year-to-date, GM has slid by more than 10%, and the average GM price target of $44.65 implies an upside potential of 56.9% at current levels.
