California's auto regulator said on Tuesday it has suspended General Motors' Cruise autonomous vehicle deployment and driverless testing permits, saying it had misrepresented information related to the safety of the autonomous technology.
Cruise's AVs posed an "an unreasonable risk to public safety," and "are not safe for the public's operation" California's Department of Motor Vehicles (DMV) said in a statement.
The suspension, which came after a series of accidents involving Cruise vehicles, is a major setback to GM's self-driving technology unit and to the nascent autonomous vehicle (AV) industry. The suspension was effective immediately.
GM has previously insisted Cruise represents a "giant growth opportunity."
In June, GM CEO Mary Barra reiterated a forecast that Cruise could generate $50 billion a year in annual revenue by 2030, a target the company has not backed away from. The automaker reported on Tuesday that it lost $723 million on Cruise during the third quarter.
The DMV added that Tuesday's "decision does not impact the company's permit for testing with a safety driver."
Cruise issued a statement saying it "will be pausing operations of our driverless AVs in San Francisco."
Cruise said the California Department of Motor Vehicles reviewed an incident on Oct. 2, when one of its self-driving vehicles was putting on the brakes but did not avoid striking a pedestrian who had previously been struck by a hit-and-run driver.
Cruise said that in that incident, "a human hit and run driver tragically struck and propelled the pedestrian into the path of the AV" which struck the pedestrian.
"The AV biased rightward before braking aggressively, but still made contact with the pedestrian. The AV detected a collision, bringing the vehicle to a stop; then attempted to pull over to avoid causing further road safety issues, pulling the individual forward approximately 20 feet."
"Our teams are currently doing an analysis to identify potential enhancements to the AV’s response to this kind of extremely rare event," it added.
In August, the regulator said it was investigating "concerning incidents" involving autonomous vehicles operated by Cruise in San Francisco and asked the company to take half its robotaxis off the roads. That month, a Cruise robotaxi was involved in a crash with an emergency vehicle in San Francisco.
Barra said the Cruise robotaxis have better safety records than human drivers.
Automated vehicles have drawn growing public and regulatory scrutiny. This month, U.S. auto safety regulators opened a probe into whether Cruise was taking sufficient precautions with its autonomous robotaxis to safeguard pedestrians.
The National Highway Traffic Safety Administration (NHTSA) said has received two reports from Cruise of incidents in which pedestrians were injured, and identified two further incidents via videos posted on websites.
The suspensions came just several months after Alphabet Inc's Waymo and Cruise were allowed to take paying passengers day or night throughout San Francisco, a significant step forward for the technology.
Shares in GM were down 1.7% in afternoon trading in New York, at their lowest in more than three years. They have fallen some 17% since UAW workers went on strike against the Detroit Three automakers. UAW on Tuesday expanded strike action to GM's assembly plant in Texas that builds its profitable full-size sport utility vehicles.