DETROIT, Dec 11 (Reuters) - General Motors ( GM ) needed

to exit its Cruise robotaxi business, most Wall Street analysts

agreed on Wednesday, but the automaker's decision to do so was

still a disappointing end for an operation that GM had touted as

a potential $50 billion revenue generator by 2030.

The largest U.S. automaker on Tuesday pulled the plug on

Cruise after evaluating the continued investments needed in a

competitive space, executives said, adding they intend to fold

some of Cruise's talent into GM to continue development of

driver assistance systems.

"We consider the news a step in the right direction for GM,

as we think investors were losing patience with its hefty

spending (~$10B) related to robotaxi development with very

little to show for its investment," Garrett Nelson, analyst at

CFRA Research wrote.

GM shares jumped 3% after-hours on Tuesday immediately after

the announcement, but gave back those gains during Wednesday's

regular session and closed down 1.3%.

Nelson said the announcement was "a black eye for the

credibility of GM management that, as recently as last year,

told investors the Cruise business could generate $50 billion in

annual revenue by 2030."

Speaking with reporters Wednesday evening, GM CEO Mary Barra

explained why the automaker had been bullish on Cruise.

"At the time we really felt we'd be rolling our vehicles

more quickly than we were," Barra said, adding "there was

definitely a regulatory component where we didn't build the

right relationships with our regulators."

Cruise came under scrutiny after an October 2023 crash in

which one of its robotaxis in San Francisco struck and seriously

injured a pedestrian after she was hit by another vehicle. Last

month, Cruise admitted to submitting a false report to influence

a federal investigation and agreed to pay a $500,000 criminal

fine as part of a U.S. Justice Department deferred prosecution

agreement.

For the year to date, GM has far outpaced its competitors.

Its stock is up 45% for 2024, while Ford's is down 14% and

Stellantis ( STLA ) is down 37%.

"I hope you see we're being proactive in making

decisions," Barra said as she also faced other questions on

cost-cutting moves the automaker is taking as it navigates

turbulence in EV demand, changing technology and a new

presidential administration.

GM recently scaled back plans for electric vehicles, sold

a stake in one of its joint venture battery plants and recorded

a $5 billion loss on its China business as it restructures. GM

is now doubling down on its core business: making

gasoline-powered pickup trucks and other large vehicles.

Cruise's competitors - including Alphabet's Waymo,

Baidu ( BIDU ) and Tesla - are well funded, and may

have better technology, analysts said. Waymo, which is expanding

its autonomous ride-hailing services, is still losing billions

of dollars per year.

Barclays noted Alphabet, which has over $100 billion in

earnings annually, can absorb costs associated with Waymo's

development. GM, however, is expected to record earnings of $14

billion to $15 billion for 2024.

"It's clear from Waymo that an AV robotaxi business is best

owned by an entity with deep pockets," Barclays said.

CHINA, TRUMP AND ELON

Separately, Barra said GM has a future in China, and that it

can be profitable with its Buick and Cadilla portfolios there.

She also discussed Tesla CEO Elon Musk and president-elect

Donald Trump, saying that she hopes the pair will help establish

a federal framework of autonomous regulations.

"I think a federal framework will allow everybody to be more

efficient. I think there's an opportunity there," Barra said.

Barra will once again have to interact with Trump, who has

publicly bashed her in the past for GM's layoffs and plant

closures in the U.S. Barra said she hopes the president elect

will be open to discussing how some of his proposed policies,

such as axing EV tax credits or increasing tariffs on Mexico and

Canada, would affect the automaker.

"My experience has been that he listens intently," she

said.

Separately, Microsoft ( MSFT ) said on Wednesday it expects

to record an impairment charge of around $800 million in the

second quarter of fiscal 2025 related to GM's Cruise decision.