The news comes as more and more automotive manufacturers look to compete with Tesla and a growing number of Chinese companies who are developing and unveiling software-powered features which are helping to boost vehicle performance, battery range and self-driving capabilities – all of which can be updated remotely and from a distance.
Last year alone Mercedes generated over a $1bn in software-enabled revenues and it expects that figure to grow significantly as it rolls out a new operating system in the coming few years.
The move to software is a process that’s been underway for many years but now manufacturers like Mercedes are no longer looking to integrate software from a range of suppliers but rather they want to be able to control the software itself while bringing in partners – hence its work with Google.
The German carmaker already has a shared revenue agreement with Nvidia, its partner on automated driving software, and that has helped it to reduce the upfront cost of buying expensive high-powered semiconductors.
Likewise, the self-driving sensor maker Luminar Technologies has struck a multi-billion dollar deal with Mercedes to integrate its sensors across a broad range of its vehicles by the middle of the decade.
Mercedes said the collaboration with Google would allow it to offer traffic information and automatic rerouting in its cars.
This is a really interesting trend in the automotive manufacturing space and as competition increases so more ‘team ups’ can be expected as attempts to differentiate product move increasingly to software.
