Shopping at your Mercedes-Benz dealer might get a lot more interesting in the future. The automaker announced that it has teamed up with Google for its navigation systems and expects to offer supercomputer performance in every new Mercedes-Benz car. It will offer automated driving sensors to compete with Tesla.
Automakers Racing to Match Tesla
Tesla has debuted a bevy of new software in recent years to increase vehicle performance, battery range, and autonomous driving. These features can even be updated and uploaded from a distance. New and old automakers are racing to catch up by offering their own software features to match Tesla. In Mercedes-Benz’s case, the carmaker agreed to a revenue-sharing plan with Nvidia Corp, which makes semiconductors.
Nvidia has partnered with the German automaker since 2020 to help bring down the expensive upfront costs of buying high-powered semiconductors. According to the Mercedes-Benz Chief Executive, figuring out how to maximize joint revenue helps lower sunk costs. For example, drivers may not use or switch on all the features allowed by the chip.
However, only by paying for an extra option package can customers get chips with Lidar sensor technology and additional hardware that allows automated driving.
Self-Driving Technology Increasingly Popular
As the technology for self-driving features gets better and better, more automakers are including the software on their vehicles. Luminar Technologies is one of the big companies that make self-driving sensors. Mercedes-Benz owns a small stake in this company, and it recently struck a multi-billion dollar deal with Luminar to integrate these sensors in new vehicles. This deal caused Luminar shares to soar up over 25%.
This group of announcements from Mercedes-Benz came recently at a software update day in California. The carmaker indicated that it intends to move into a strategy-based method of integrating important software instead of the previous method, which was more patchwork in attempting to keep up. By striking deals with a range of big suppliers, Mercedes-Benz hopes to go beyond just staying competitive and instead, take the lead in many areas.
Partnership With Google
Collaborating with Google will allow Mercedes to offer traffic information and automatic rerouting features in its new vehicles. Drivers can also use other Google services in Mercedes-Benz cars, including YouTube. These features are available when the car is parked or is in autonomous driving mode. This will allow the driver to take their eyes off the road in certain situations as long as they can still resume control if necessary.
Some other carmakers, including GM, Nissan, and Ford, have already embedded packages of Google services into their cars. These packages allow drivers to use things like Google Maps and Google Assistant, among others.
Mercedes-Benz generated over one billion dollars from software revenue in 2022, and the company expects that to rise even further by 2030. The automaker expects to roll out the new MB.OS operation system in the middle of this decade.
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