GM's robotaxi startup is heading to two more Texas cities, claiming more space in Tesla's backyard

Cruise AV
GM's Cruise is expanding in Tesla's backyard.Cruise
  • Cruise is launching in Houston and Dallas.

  • The robotaxi service started testing in Austin at the end of last year.

  • Cruise's expansion is the latest blow to Tesla as it relies more on autonomy to drive profits.

Robotaxi startup Cruise is gearing up to take up more space in Tesla's backyard.

Kyle Vogt, CEO of the General Motors-backed autonomous vehicle startup, tweeted this week that Cruise would begin supervised autonomous driving in Houston in a few days, followed by an expansion to Dallas. After the testing period, Cruise plans to give customers access to the driverless rides.

The Texas expansion comes after an initial launch in Austin at the end of last year, and a full 24-hour rollout of its 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.

While Cruise continues to expand its driverless offerings, Tesla has struggled to deliver completely driverless cars to its customers. The company's rollout of its more advanced driver-assist software, known as "Full Self Driving" (FSD), has been marred by reports of accidents and a sweeping recall of all FSD-equipped Teslas earlier this year.

Tesla is counting on autonomy to make up for lost margins

After a series of price cuts put a significant dent in Tesla's first quarter earnings, CEO Elon Musk told investors that the company has a plan for recovering its hefty profit margins: selling more autonomous features.

"We do believe we're, like, laying the groundwork here, and that it's better to ship a large number of cars at a lower margin, and, subsequently, harvest that margin in the future as we perfect autonomy," Musk said on an earnings call last month.

While Tesla stakes its future on autonomy, Cruise is just the latest company to beat Tesla at deploying this technology. Outside of robotaxi services like Cruise, other companies have moved more quickly 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 fights to keep its industry disruptor title.

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