Earlier today, Reuters reported that German automaker Mercedes-Benz had signed a cooperation agreement with Google. The two parties will work together on navigation systems based on self-driving sensors in each vehicle. These sensors and software will provide “supercomputer-like performance” on the car. This will allow the German carmaker’s vehicles to compete with Tesla and new Chinese companies.
This is crucial for Mercedes-Benz as Tesla dominates the market with models that have pioneered some software-based features. These allow vehicle performance, battery range, and self-driving capabilities to be updated remotely.
According to Mercedes-Benz, the partnership with Google will allow it to provide instant traffic information and automatic re-routing. Drivers will also be able to watch YouTube on the car’s in-car entertainment system. Not a big deal, but still interesting.
Mercedes-Benz CEO Ola Kaellenius also said the company had agreed to share revenue with semiconductor maker Nvidia to reduce the upfront costs of buying expensive high-performance components. Nvidia, by the way, has been a partner in the company’s self-driving software since 2020.
“You just pay for a heavily subsidized chip and then figure out how to maximize joint revenue,” he said. So even if you don’t turn on all the features that the chip allows, the sunk costs would be much lower.
Separately, Luminar Technologies, a maker of self-driving sensors in which Mercedes has a small stake, said it had struck a multi-billion dollar deal with the carmaker to integrate its sensors into a range of vehicles.
Mercedes-Benz’s passenger car business delivered around 2 million vehicles to customers last year, down 1% on the previous year. However, the company’s EV sales jumped from 52,500 in 2021 to 117,800 last year.
