In a strategy update event focused on software held in California, Mercedes-Benz unveiled a Google partnership to include supercomputers in its cars.
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In an effort to compete with Tesla and Chinese newcomers, Mercedes-Benz announced on Wednesday that it has partnered with Google on navigation and will provide “super computer-like performance” in every vehicle equipped with automated driving sensors.
New and seasoned automakers are vying to emulate Tesla’s software-powered innovations, which enable remote updates to a vehicle’s performance, battery life, and self-driving capabilities.
In order to reduce the initial cost of purchasing expensive high-powered chips, the German automaker agreed to share income with semiconductor manufacturer Nvidia Corp, its partner on automated driving software since 2020, Chief Executive Ola Kaellenius said on Wednesday.
He explained, “You only pay for a heavily subsidized chip, and then figure out how to maximize joint revenue,” contending that the sunk costs would be little even if drivers did not activate every chip-enabled feature.
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However, Lidar sensor technology and other hardware for autonomous “Level 3” driving, which have a greater variable cost, would only be available to clients who paid for an additional option package, according to Kaellenius.
Mercedes owns a small stake in self-driving sensor manufacturer Luminar Technologies Inc., which announced on Wednesday that it had reached a multi-billion dollar agreement with the automaker to integrate its sensors into a variety of its vehicles by the middle of the decade. This news sent Luminar shares up over 25%.
Mercedes highlighted the philosophy behind a process that has been ongoing at the automaker for years to transition from a patchwork approach incorporating software from a range of vendors to controlling the core of its software and bringing partners in during a software update day in Sunnyvale, California.
It produced over one billion euros ($1.06 billion) in software-enabled sales in 2022, and it anticipates that after launching its new MB.OS operating system in the middle of the decade, that number will increase to a high single-digit billion euro figure by 2030.
As a percentage of overall income, this estimate is more conservative than those made by companies like Stellantis and General Motors. “We take a prudent approach because no one knows how big that potential pot of gold is at this stage,” Kaellenius said.
Mercedes claimed that its partnership with Google will enable it to provide autonomous rerouting and traffic information in its vehicles.
Whether the vehicle is parked or in Level 3 autonomous driving mode, which permits a driver to take their eyes off the wheel on specific roads as long as they can restore control if necessary, drivers will also be able to watch YouTube on the entertainment system.
Several automakers, like Ford, General Motors, Renault, Nissan, and Nissan, have integrated a full suite of Google services inside their cars, including Google Maps, Google Assistant, and other tools.
Car and van leasing business Vanarama revealed last year that, according to a study, Teslas will be more intelligent than humans by 2033.
According to the corporation, all cars using Mercedes’ future modular architecture platform will also include so-called hyper screens that span the whole inside of the vehicle.