Morgan Stanley warns General Motors investors to lower their expectations for Cruise autonomous cars (GM)

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GM's Cruise autonomous driving unit plants to double in size this year.
Morgan Stanley, meanwhile, is warning investors that revenue and profit could still be far off.
The Wall Street bank says the ability to remove safety drivers from the cars is crucial, but could take years.

Morgan Stanley is trying to tamper investor excitement for General Motor's Cruise robo-taxi unit.

In a note to clients this week, the Wall Street bank told clients that the self-driving department may not ever turn revenue if it can't remove backup safety drivers from the cars.

"While we think GM Cruise has important technological value, we urge investors to lower expectations on revenue generation and profitability of the unit," analyst Adam Jonas told clients in a research note.

"Taking nothing away from GM cruise, it is our understanding that the technology required to remove human drivers at an acceptable level of consumer safety is likely many years away," he continued. "And the legal and regulatory construct to support, even proven technology, may present even greater hurdles largely outside of GM Cruise's control."

Jonas is far from the first to downplay the hype around self-driving cars.

Take Google's Waymo, for instance, which is running the only consumer-facing, revenue-driving self-driving fleet. Even Waymo still has backup drivers in cars, making the service a de-facto Uber ride, for all practical purposes.

GM's hope is that Cruise can soon operate without a driver — and eventually in a car that doesn't even have a steering wheel. Federal regulators have opened up that possibility to the public in a 60-day comment period on GM's 15-month old proposal.

High-profile incidents, like the killing of a pedestrian in Arizona by an Uber self-driving car in 2018, have added to some skepticism of the technology. Still, given the massive number of road deaths each year in the US, advocates point to more safety with robots at the wheel than humans.

"We are constructive on the development of autonomous cars, but see room for the market to elongate the adoption curve scenarios," Jonas said. "Given the technological challenge as well as the legal and regulatory framework."

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