Mercedes-Benz has teamed up with Google to create a navigation system, signaling the automaker’s determination to compete with Tesla and other newcomers in the software-powered features arena. The collaboration will provide Mercedes drivers with traffic information and automatic rerouting. In addition, vehicles with automated driving sensors will have “supercomputer-like performance,” making Mercedes the first automaker to build its branded navigation experience based on Google technology.
To keep up with Tesla’s software-powered features, other automakers are racing to match their performance, battery range, and self-driving capabilities, which can be updated remotely. Mercedes is partnering with semiconductor maker Nvidia Corp to lower the upfront cost of purchasing high-powered semiconductors, sharing revenue with them to achieve this goal.
CEO Ola Kaellenius reasoned that the sunk costs of buying the heavily subsidized chip would be low, even if drivers did not activate every feature allowed by the chip. However, only customers who purchase an extra option package would have cars equipped with Lidar sensor technology and other hardware for automated “Level 3” driving, which have a higher variable cost.
Mercedes also revealed that it has a small stake in self-driving sensor maker Luminar Technologies Inc, which recently announced a multi-billion dollar deal with the automaker to integrate its sensors across a broad range of its vehicles by the middle of the decade.
Mercedes is moving from a patchwork approach of integrating software from a range of suppliers to controlling the core of its software and bringing partners in. At the automaker’s software update day in Sunnyvale, California, Mercedes generated over €1 billion (USD $1.06 billion ) from software-enabled revenues in 2022 and expects that figure to rise to a high single-digit billion euro figure by 2030 after it rolls out its new MB.OS operating system from mid-decade.
All vehicles based on the upcoming Mercedes modular architecture platform will have hyperscreens extending across the cockpit of the car. The automaker generated over €1 billion ($1.06 billion) from software-enabled revenues in 2022 and expects that figure to rise to a high single-digit billion euro figure by 2030 after it rolls out its new MB.OS operating system from mid-decade. However, Mercedes takes a prudent approach, as “no-one knows how big that potential pot of gold is at this stage,” according to Kaellenius.
Mercedes’ collaboration with Google and partnerships with semiconductor makers and self-driving sensor manufacturers demonstrate the automaker’s commitment to staying ahead of the curve in a rapidly evolving automotive industry.
