Mercedes-Benz owner Daimler and supplier Robert Bosch are teaming up to develop self-driving cars in an alliance aimed at accelerating the production of “robo-taxis”.
The pact between the world’s largest maker of premium cars and the world’s largest automotive supplier forms a powerful counterweight to new auto industry players like ride-hailing firms Uber and Didi which are also working on self-driving cars, Reuters reports.
Technology companies and carmakers are striving to adjust to a shifting landscape in the auto industry as consumers increasingly use smartphones to locate, hail and rent vehicles, rather than going out and buying cars.
The alliance not only marks an end to Daimler’s efforts to develop an autonomous car largely on its own, but moves the auto industry’s ambitions beyond simply developing prototype vehicles towards industrial-scale production of self-driving cars, the report said.
Financial terms were not disclosed of the deal between the two German companies, which was announced on Tuesday.
Bosch – which was founded in 1886, the same year that Mercedes founder Carl Benz patented the motorcar – will develop software and algorithms needed for autonomous driving together with the carmaker.
Bosch said Mercedes would be able to use the jointly developed system for two years before it could be offered to competitors.
The deal will help the automotive supplier make up ground in a competitive autonomous driving system sector where rivals Continental, Delphi, ZF and others have also made heavy investments.
For Daimler and its Mercedes division, teaming up with Bosch helps them throw more engineering resources at autonomous cars, allowing them to speed up the process of creating a production-ready system for autonomous cars by several years.
The autonomous system will now be ready by the beginning of next decade, Daimler said, without disclosing when it had first envisaged the commercial launch of automated taxis, or robo-taxis.
“The prime objective of the project is to achieve the production-ready development of a driving system which will allow cars to drive fully autonomously in the city,” Daimler said in a statement on Tuesday.
The company will continue to build and sell vehicles that can be manually operated by individual drivers.
The market for advanced driver assistance systems and autonomous vehicles is expected to grow from about US$3 billion in 2015 to US$96 billion in 2025 and US$290 billion in 2035, Goldman Sachs said last year.
Daimler is focusing its efforts on the app-based car-sharing and ride-hailing sector dominated by China’s Didi, and San Francisco-based Uber and Lyft.
Like autonomous cars, this market is a big global growth area and is expected to expand by 28 percent a year to 2030, according to consultancy McKinsey.
“Within a specified area of town, customers will be able to order an automated shared car via their smartphone. The vehicle will then make its way autonomously to the user,” Daimler said. “The idea behind it is that the vehicle should come to the driver rather than the other way round.”
The current Mercedes E-Class can cruise without driver input on highways, keeping the distance to the car in front and staying in lane using a system which has “level 2″ autonomy.
Full autonomy – known as an “eyes off, brains off” or “level 5″ system – does away with even the need for a steering wheel.
“We don’t want to wait until level 3 has arrived before we start with level 4/5. That will be too late,” Christoph von Hugo, a senior Mercedes-Benz safety manager, told Reuters.
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