Mercedes-Benz AG has tapped Google to assist with a reboot of software-based features that are expected to generate about 10 billion euros (US$10.6 billion) of additional revenue by the end of the decade.
The new operating system, to debut in about 2025, is scheduled to go into models spanning the entire Mercedes lineup and keep vehicles updated throughout their lifespan, the luxury automaker said on Wednesday.
Mercedes is working with select partners including Alphabet Inc, Nvidia Corp and Luminar Technologies Inc, but said it plans to keep a tight grip on technology to guard against revenue slipping away to tech competitors.
Photo: AFP
“When you build a software house, you don’t have to lay every single brick yourself or put up every single tile in the bathroom,” CEO Ola Kallenius said on Wednesday. “You’ve got to be in control as the architect, but leverage tech partnerships and make sure you work with the best.”
Automakers have tripped up on developing their own software functions that are outside of their decades-old hardware expertise. Last year, Volkswagen AG delayed new electric Audi and Porsche models because it could not acquire an accompanying operating system to work in time.
The jury remains out on who might profit most from the transformation into rolling computers. Software-enabled automotive revenue is expected to reach about US$700 billion by 2030, UBS Group AG said last year.
Mercedes expects to spend 25 percent of its research and development budget on software by 2025. Last year, the company generated more than 1 billion euros in revenue from software-based offerings such as navigation and live-traffic services.
The automaker forecast that this revenue should be in the high single-digit billion-euro range by the end of the decade.
It is cooperating with Nvidia on software and chips, and with Luminar on laser-based radar systems for driver-assistance features, the company said on Wednesday.
Mercedes is also hiring more software talent, and is close to reaching a target of adding about 3,000 new engineers, Kallenius said.
Nearer-term, Mercedes expects 1 billion euros in earnings before interest and taxes on software sales by 2025, chief financial officer Harald Wilhelm said on Wednesday.
That is split across existing infotainment and early offerings for autonomous driving. Mercedes disclosed that its agreement with Nvidia would see the chipmaker take half of net sales for autonomous software.
To keep margins strong through the electric vehicle and software transitions, Mercedes has shifted focus to top-end vehicles such as the G-Wagon sport utility vehicle. While this has paid dividends in the form of huge pricing gains, substantial discounts to flagship electric vehicles in China late last year suggest the company might have run up against limits to this strategy.
Aside from designing navigation technology with Google, which is to be done via a licensing deal, drivers are likely to have access to the YouTube app and hands-free driving in urban environments where regulation allows.
The company is also working on automated driving for speeds of up to 130kph. Mercedes last month said it plans to offer such features in the US for certain vehicles by the end of the year.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
JOINT EFFORTS: MediaTek would partner with Denso to develop custom chips to support the car-part specialist company’s driver-assist systems in an expanding market MediaTek Inc (聯發科), the world’s largest mobile phone chip designer, yesterday said it is working closely with Japan’s Denso Corp to build a custom automotive system-on-chip (SoC) solution tailored for advanced driver-assistance systems and cockpit systems, adding another customer to its new application-specific IC (ASIC) business. This effort merges Denso’s automotive-grade safety expertise and deep vehicle integration with MediaTek’s technologies cultivated through the development of Media- Tek’s Dimensity AX, leveraging efficient, high-performance SoCs and artificial intelligence (AI) capabilities to offer a scalable, production-ready platform for next-generation driver assistance, the company said in a statement yesterday. “Through this collaboration, we are bringing two
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS