General Motors (NYSE:GM) has staked out a position as a self-driving leader via its GM Cruise subsidiary, which is gearing up to launch a fleet of self-driving urban taxis next year.
Soon, it will bring some of that technology to more of its retail customers. GM said that its Super Cruise system, a hands-off highway driving system similar to Tesla's (NASDAQ:TSLA) Autopilot, will be rolled out to all Cadillac models in 2020 -- and to GM's other, more affordable brands after that.
Wait, GM is going to start selling self-driving Cadillacs?
Not quite. Properly speaking, Super Cruise isn't "self-driving." It's an advanced driver-assist system that allows drivers to take their hands off the steering wheel under certain conditions (like cruising on the highway in good weather). In the lingo of autonomous-vehicle experts, Super Cruise is an advanced Level 2 system, one that requires drivers to stay alert and ready to take control on short notice. (Click here to learn more about the levels of self-driving technology.)
Super Cruise's capabilities are similar to those of the current iteration of Tesla's Autopilot system. While Tesla CEO Elon Musk has made big promises about what Autopilot will become in the future, right now, Tesla officially defines it as a Level 2 system (albeit, like Super Cruise, an advanced one).
The difference between Autopilot and Super Cruise comes down mostly to user experience, and to the stricter limitations set by GM on its system. Among other things, Super Cruise incorporates several innovations intended to ensure that drivers are alert, and to get their attention when needed in non-annoying ways. GM launched Super Cruise as an option on the big Cadillac CT6 sedan last year. Reviews have been very favorable.
But it's important to make this clear: Vehicles with Super Cruise (or Autopilot, for that matter) are not "self-driving cars," despite what you may have heard.
If GM has already launched Super Cruise, what's the big deal?
Right now, you can get Super Cruise on the top-of-the-line Cadillac sedan, the CT6. But it's a $5,000 option that's only available on the top two trim levels -- or put another way, plan to spend at least $73,000 on your Super-Cruise-equipped Cadillac.
The strong hint with this announcement is that the price of Super Cruise will come down once it's rolled out as an option on other Cadillac models -- and it'll come down further once it's made available on more pedestrian Chevrolet, Buick, and GMC models.
How is Super Cruise related to GM Cruise, the self-driving taxi subsidiary?
It isn't directly related. GM was working on Super Cruise -- and had tentatively decided on the name -- long before it bought Cruise Automation, the San Francisco self-driving start-up that became GM Cruise. Development of the Super Cruise system is still done by a separate group within GM, though there may be some technology-sharing.
What's the upshot of this announcement for investors?
Reviews so far suggest that Super Cruise is a winner. GM has done a good job of building a safe, effective system that manages to be unobtrusive while ensuring that the car's human driver remains alert.
GM could probably sell a lot of cars with Super Cruise if it were more affordable, and if more people had the chance to try it. Expanding it to all Cadillacs, including lower-priced models like the new XT4 crossover, will make it possible for more customers to buy it. And expanding it to GM's other U.S. brands will make it widely accessible.
That's good for reasons that go beyond the profit that GM will make on vehicles equipped with Super Cruise. GM, with quite a bit of justification, wants to be seen as a technology leader within the auto industry. GM Cruise and the battery-electric Chevrolet Bolt EV have impressed critics and analysts, but so far only a few of GM's retail customers have been able to try (much less buy) Super Cruise.
Giving more people the opportunity to try and to own GM's advanced technology will only help boost the company's image as a technology leader -- which in turn should boost its profits and stock price over time.