Shares of General Motors Co's (GM.US) self-driving car unit Cruise have fallen by more than half from a quarter ago as the fallout from an October accident continues to weigh on the self-driving car company. According to an email, Cruise employees were told that third-party estimates of its stock price were $11.80.
That was below the $24.27 estimate a quarter ago. Cruise's valuation was cut after Apple (AAPL) announced this week that it was canceling its decade-long electric car development plan, a source said.
"We cannot ignore that this estimate is significantly lower than what we have seen before, and that has real-life implications for each of us," Cruise CEO Craig Glidden wrote in an email.
Cruise has been trying to recover from an October incident in which a woman was hit by a human-driven car and then dragged by one of Cruise's self-driving cars, causing a secondary accident. The company's license to operate in California has been suspended, and Cruise has stopped all testing on U.S. public roads.
Glidden said Cruise "has a long way to go to achieve large-scale commercialization." The company last year planned to launch self-driving taxis in nearly a dozen U.S. cities, but has since laid off a quarter of its workforce, with the CEO, co-founder and other employees leaving.
It's been a tough few months for Cruise, once a promising company. GM said last month it would cut about $1 billion from Cruise's annual budget and released a shocking safety analysis of the October crash, which found evidence that executives withheld important data from regulators, the media and the public. Several U.S. government agencies, including the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice (DOJ) and the National Highway Traffic Safety Administration (NHTSA), are investigating the company.
Cruise aims to return human drivers to city streets on a limited basis later this year, possibly in Houston or Dallas, according to people familiar with the matter. However, it was reported last month that Cruise executives told some engineering and operations staff in internal meetings in recent weeks that they shouldn't expect to see robotaxis on city streets again before the fourth quarter.
A Cruise spokesperson said the new valuation reflects "current market conditions and our operating realities," adding that the company is focused on "earning the trust of regulators and the public ahead of a relaunch."