The new operating system, to debut around 2025, will go into models spanning Mercedes’s entire line up and keep vehicles updated throughout their lifespan, the luxury-car maker said on Wednesday. Mercedes is working with select partners including Alphabet, Nvidia and Luminar Technologies, but said it plans to keep a tight grip on technology to guard against revenue slipping away to tech competitors.
Carmakers 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 couldn’t get an accompanying operating system to work in time. The jury remains out on who will profit most from the transformation into rolling computers. Software-enabled automotive revenue will reach around $700-billion by 2030, UBS Group AG estimated last year.
Nearer-term, Mercedes sees €1-billion in earnings before interest and taxes on software sales by 2025, CFO Harald Wilhelm said at the event on Wednesday. That is split across existing infotainment and early offerings for. Mercedes disclosed that its agreement with Nvidia sees the chipmaker take half of net sales for autonomous software going forward.