Key Points
- GM expects Super Cruise to generate $2 billion annually within five years. It offers advanced driver assistance with a stronger monitoring system.
- The service is free for three years and requires a paid subscription of $25 per month or $250 per year.
- GM stock remains undervalued compared to Tesla, with investors concerned about tariffs.
- The automaker aims to double the number of Super Cruise-equipped vehicles by 2025.
General Motors is doubling down on its Super Cruise driver assistance technology, positioning it as a key revenue stream and a competitor to Tesla’s Autopilot. The company expects Super Cruise to generate $2 billion annually within five years, reinforcing its push to be recognized as a technology leader rather than just an automaker. This move comes as GM exits its loss-making Cruise robotaxi business, shifting its focus from fully autonomous taxis to hands-free consumer-driving systems.
Super Cruise, available on about 20 high-end GM models, including Cadillacs and large SUVs, offers partially automated driving with a more advanced driver monitoring system than Tesla’s Autopilot. Its robust sensor technology ensures drivers remain attentive.
After a free three-year trial, customers can purchase Super Cruise for $2,200 to $2,500 on select models. Afterward, they can subscribe for $25 per month or $250 annually. Despite its technological advancements, GM has yet to see Tesla-like investor enthusiasm. Its stock trades at only five times earnings compared to Tesla’s 120 times earnings.
Investor concerns extend beyond technology to potential tariff impacts from the Trump administration on GM’s manufacturing operations in Canada and Mexico. Following its latest financial results, GM’s stock dropped 8.9% on Tuesday and another 0.5% on Wednesday.
However, CEO Mary Barra remains optimistic, citing driver assistance technology as a significant growth opportunity. GM plans to expand the number of vehicles equipped with Super Cruise to more than 720,000 by 2025. In 2024, about 20% of 18,000 Super Cruise users opted to continue their subscriptions after the trial period ended, and an additional 33,000 vehicles will reach the end of their free trial in 2025.
Analysts see the potential of Super Cruise to drive long-term revenue and customer loyalty. While hardware costs, such as cameras and radar, are substantial, software-driven subscriptions provide high-margin profitability. GM could see a steady stream of recurring revenue if renewal rates remain strong, reinforcing its push into hands-free driving technology.
