Mercedes-Benz has teamed up with Google on navigation and will offer “supercomputer-like performance” in all their cars with automated driving sensors as it prepares to compete with Tesla and Chinese competitors, it said on Wednesday.
New and old automakers are in a race to compete with software-powered features pioneered by Tesla. The feature allows for updating features like vehicle performance, battery range, and self-driving capabilities from a distance.
The German carmaker agreed to share revenue with its partner on automated driving software since 2020, semiconductor chip maker Nvidia to bring down the cost of buying expensive high-powered semiconductors, CEO Kaellenius said on Wednesday.
“You only pay for a heavily subsidized chip, and then figure out how to maximize joint revenue,” he said, reasoning that the sunk costs would be low even if drivers did not turn on every feature allowed by the chip.
Kaellenius said, only customer paying extra for the optional package would have cars equipped with Lidar sensor technology and other hardware for “Level 3” automated driving, which come with a higher variable cost.
Luminar Technologies Inc, a self-driving sensor maker, said on Wednesday it got a multi-billion-dollar deal with Mercedes to integrate its sensors across a wide range of its vehicles by the middle of the decade, shooting up its shares up over 25%.
Mercedes announced at a software update day in Sunnyvale, California, the details of the strategies behind a process underway for years at the company to move from a patchwork approach integrating software from a range of suppliers to controlling the core of its software and to bring partners in.
Over one billion euros have been generated from software-enabled revenues in 2022 and it is expected that the figure will rise to a high single-digit billion euro figure by 2030 after its new MB.OS operating system gets rolled out from mid-decade.
“We take a prudent approach because no-one knows how big that potential pot of gold is at this stage,” Kaellenius said.