Mercedes-Benz has announced that it has partnered with Google on navigation and will offer supercomputer-like performance in every car equipped with automated driving sensors in order to compete with Tesla and Chinese newcomers.
To reduce the upfront cost of purchasing expensive high-powered semiconductors, the German carmaker agreed to share revenue with semiconductor maker Nvidia Corp, its partner on automated driving software since 2020, according to Chief Executive Ola Kaellenius on Wednesday.
“You only pay for a heavily subsidized chip, and then figure out how to maximize joint revenue,” he explained, arguing that the sunk costs would be low even if drivers did not use every feature 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 automated Level 3 driving, which has a higher variable cost, according to Kaellenius.
Luminar Technologies Inc, a self-driving sensor maker in which Mercedes owns a small stake, announced a multi-billion dollar deal with the carmaker on Wednesday to integrate its sensors across a wide range of its vehicles by the middle of the decade, sending Luminar shares up more than 25%.
Mercedes-Benz stated that its collaboration with Google will enable it to provide traffic information and automatic rerouting in its vehicles. 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 resume control if necessary, drivers will also be able to watch YouTube on the car’s entertainment system.
Other automakers, such as General Motors, Renault, Nissan, and Ford, have integrated an entire suite of Google services into their vehicles, including Google Maps, Google Assistant, and other applications.
According to the company, all vehicles built on Mercedes’ upcoming modular architecture platform will have so-called hyperscreens that extend across the cockpit.