California issued an order to General Motors' (NYSE:GM) Cruise division Tuesday, demanding the removal of its autonomous vehicles from state roads.
The state referred to the vehicles as a potential threat to public safety and accused the company of misrepresenting information about the technology's safety.
The Department of Motor Vehicles (DMV) in California declared the suspension of Cruise's permit for autonomous vehicle deployment and driverless testing, effectively halting the company's testing of the vehicles without safety drivers.
"Based upon the performance of the vehicles, the department determines the manufacturer's vehicles are not safe for the public's operation," the DMV said in a statement.
The DMV added that Cruise had "misrepresented any information related to safety of the autonomous technology of its vehicles."
The state agency said Cruise is allowed to challenge the suspension within five days. However, the company has not said if it plans to do so.
The suspension follows a series of accidents involving Cruise vehicles and is a major blow to GM's ambitions in the self-driving sector, an area the company has previously called a major growth opportunity.
Cruise released a statement saying, "We will be pausing operations of our driverless AVs in San Francisco. Ultimately, we develop and deploy autonomous vehicles in an effort to save lives."
Cruise said the DMV was investigating an incident that occurred on October 2nd. During the incident, one of the robotaxis was braking but was unable to avoid hitting a pedestrian that was previously struck by a hit-and-run driver.
"When the AV tried to pull over, it continued before coming to a final stop, pulling the pedestrian forward," Cruise said.
"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.
The DMV report claims that Cruise did not disclosed all video footage of the accident and said "Cruise's vehicles may lack the ability to respond in a safe and appropriate manner during incidents involving a pedestrian."
Shares of GM are down 2.23% in mid-day trading Wednesday.