General Motors plans to offer “unattended” self-driving capabilities on its highest-selling and most profitable vehicles – large pickup trucks and SUVs – as it seeks new revenue streams from its massive technology investment.
Last year, General Motors said it would offer autonomous highway driving capabilities on its expensive but low-selling electric SUV, the Cadillac Escalade IQ, by 2028. On Wednesday, the automaker said it would expand the service to pickup trucks and other large SUVs, but did not specify a timetable.
Many assisted driving systems control steering and speed in certain settings (sometimes hands-free) but require the driver to remain focused. These include Tesla’s Full Self-Driving (supervised) system and General Motors’ Super Cruise feature, which debuted about a decade ago.
Only a few carmakers have introduced sight-diversion systems, including Mercedes-Benz, and their service is usually limited to small geographic areas at low speeds, such as in stop-and-go traffic.
Some industry executives say distracted driving, in which control is exchanged back and forth between the car and the driver, raises thorny safety and liability issues and may not interest enough car buyers.
Sterling Anderson, GM’s chief product officer who previously worked at self-driving trucking company Aurora, said GM is building “a self-driving system that can operate safely on the highway and actually save you time.” GM will eventually expand the service to other roads, he said.
New software brain
General Motors is developing a new software backbone for future vehicles to provide self-driving systems and other digital features for which it expects drivers will be willing to pay. GM executives outlined the plans at an event in New York on Oct. 21.
A central computer will act as the vehicle brain, allowing the car to receive remote updates like a smartphone. Tesla, Rivian and many Chinese automakers are already ahead of traditional automakers in designing the ability to send software updates remotely to vehicles.
Anderson said that internally at GM, he calls these new cars “robots.”
“We’re thinking about how to make your life better… because your vehicle knows what you need before you need it,” he told Reuters.
Sam Abuelsamid, vice president of market research at automotive research firm Telemetry, said GM’s plan to transform its cars into rollable, updateable computers will be critical to competing with Chinese automakers and pure electric vehicle brands such as Tesla. If not, “they will fall further behind their competitors.”
Auto executives and analysts say one reason traditional automakers have struggled with software is that they have long outsourced much of the work to suppliers. Anderson said GM is developing a new “centralized computing” model internally that would give the company more control over updates and features.
“The world opens up when you have software that controls the entire system in a way that you never had when different vendors controlled the digital connectivity of the car,” Anderson said.
Aim for higher profit margins
The average profit margin for automakers selling vehicles is about 10%. According to analyst firm PricewaterhouseCoopers, profit margins on software-related services can reach 30% to 40%.
In a report last month, UBS expected GM’s digital revenue to grow from $3.2 billion this year to $9.6 billion in 2036. The bank called GM’s digital capabilities “an undervalued and underappreciated opportunity.”
Ed Nightingale, GM’s vice president of digital products, said GM’s goal is to provide attractive features to owners because it can’t start “charging for something as part of the core experience that you’ve always had.”
General Motors said it will introduce an artificial intelligence assistant to the Cadillac Lyriq SUV in the coming months.
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