It just can't compete.
Alongside electrified powertrains and related technologies, autonomous vehicles represent the most significant mobility development currently in progress. Automakers already offer Level 2 self-driving, while Level 3 is beginning to be introduced, such as in the all-new Mercedes-Benz S-Class flagship. However, the German automaker appears to have made a strategic decision involving autonomous vehicles that could affect it for years to come.
According to a report from German-language publication Redaktions Netzwerk Deutschland, Mercedes is pulling out of the race to achieve Level 5 autonomy. The reason is best summed up by a company spokesperson: "We don't compete in any race that we can no longer win." Another key reason for the company's decision is money. "Our investors don't just expect sales, but also especially profit," the spokesperson added.
Now, it's important to understand it's not that Mercedes is completely abandoning self-driving technologies, it's just that it's no longer seeking Level 5, at least on its own. Whoever does manage to reach Level 5 first will benefit from significant financial and branding advantages for years to come, but Mercedes sees the writing on the wall regarding its ability to deliver here.
Its decision also does not mean Mercedes will no longer develop autonomous vehicle technologies. In fact, just a few days ago, Mercedes and Waymo announced a partnership to build driverless semi-trucks.
Last month, Waymo also revealed plans to expand its driverless ride-hailing services throughout Arizona with its fleet of modified Chrysler Pacifica minivans. In the very near future, this 400-vehicle fleet will become fully driverless. Mercedes' decision is probably for the best because unlike firms such as Waymo, it has numerous other projects in various stages of development.
Funneling resources into just one or two areas of technology is not smart business for a major international automaker, so perhaps Level 5 is best left to tech firms like Waymo and even Amazon.