Automakers old and new are rushing to emulate Tesla‘s software-powered features, which allow car performance, battery range, and self-driving capabilities to be updated remotely.
Now, Mercedes-Benz and Google have signed a long-term agreement that will allow the German manufacturer authority over its intellectual property and business while providing drivers with Google navigation, maps, and YouTube.
Drivers can watch YouTube on the car’s entertainment system when the car is parked or in Level 3 autonomous driving mode, which allows a driver to take their eyes off the wheel on certain roads as long as they can restore control if necessary. In addition, Mercedes-Benz will use Google Maps data to enable assisted driving features such as automatic speed adjustments before intersections, roundabouts or curves.
Several automakers, such as General Motors, Renault, Nissan, and Ford, have integrated a whole suite of Google services inside their vehicles, including Google Maps, Google Assistant, and other applications.
According to the company, all vehicles built on Mercedes’ future modular architecture platform will include so-called hyperscreens that expand over the cockpit.
“We invite only the very best partners to enhance our operating system and to add to the Mercedes-Benz customer experience. Google has been a leader in maps and navigation for many years. With our strategic partnership, we are excited to create unique services and to elevate the level of convenience for our customers. It will be deeply integrated within our signature Mercedes-Benz user interface and fully connected to relevant vehicle functions like the state-of-charge,” said Ola Källenius, Chief Executive Officer, Mercedes-Benz.
“You simply pay for a significantly subsidised chip, and then work out how to optimise joint revenue,” he explained, arguing that the sunk costs would be low even if drivers did not use every option available to them.
However, only customers who pay for an additional option package will have cars equipped with Lidar sensor technology and other hardware for autonomous “Level 3” driving, which has a greater variable cost, according to Kaellenius.
“Our partnership with Mercedes-Benz brings advanced technologies from Google Maps Platform, Cloud, and YouTube to help create new experiences for drivers. In addition to enabling Mercedes-Benz to design a customized navigation interface, we’ll provide our AI and data capabilities to accelerate their sustainability efforts, advance autonomous driving, and create an enhanced customer experience,” Sundar Pichai, Chief Executive Officer, Google and Alphabet
Mercedes’ remarks during a software update day in Sunnyvale, California, highlighted the strategy behind the carmaker’s years-long effort to transition from a patchwork approach incorporating software from a variety of vendors to controlling the core of its software and bringing partners in.
It produced over one billion euros ($1.06 billion) in software-enabled sales in 2022 and anticipates that figure to increase to the high single-digit billion euro range by 2030, once its new MB.OS operating system is released in the middle of the decade.
Mercedes-Benz has been developing its own operating system, MB.OS, for several years. This operating system will be available in the next generation of Mercedes automobiles (internally known as MMA), which are planned to go on sale by the end of 2024.
Mercedes-Benz Mobility AG provides finance, leasing, automobile subscription and rental, fleet management, charging and payment digital services, insurance brokerage, and new mobility services. Gottlieb Daimler and Carl Benz founded it in 1886.
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