Mercedes-Benz Bets on Chinese AI Firm Momenta for Autonomous Driving Comeback in China
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Exclusive-Mercedes to use Momenta software in 4 models, accelerate China comeback, sources say
SHANGHAI/BERLIN (Reuters) - Mercedes-Benz is betting on China's Momenta to help it win back market share in the world's biggest auto market, with plans for fresh investment and at least four future models to use the autonomous driving startup's software, three sources with knowledge of the matter said. The plans, which have not been previously reported, will make autonomous-driving developer Momenta the first Chinese supplier picked by Mercedes to be a primary provider of a key technology and selling point for its products, as intense competition and technological innovation in China force Western automakers to rethink their supply-chain strategies. The German premium automaker has since 2017 had an investment in Momenta but the two companies have yet to publicly announce jointly developed products. In the years since, the Chinese firm has emerged as one of China's leading suppliers of advanced driving assisted system (ADAS) features similar to Tesla's full self driving that can navigate urban traffic with human drivers' supervision. Mercedes intends to make a fresh $75-million investment in Momenta and may invest more as a cornerstone investor in Momenta's initial public offering scheduled in the first quarter of 2025, the sources said. It has chosen Momenta as its ADAS supplier in four models to be launched in China from 2025 to 2027 and is discussing internally whether to use Momenta software in more Chinese models beyond 2027, one of the people said. It is also working with Momenta on preliminary plans to use the Chinese supplier's technology in Mercedes models outside China, two of the people said. Mercedes and Momenta declined to comment. Mercedes has also been exploring ADAS options with U.S. artificial-intelligence chipmaker Nvidia as part of a partnership announced in 2020, when they said they would develop Mercedes-Benz vehicles with upgradable automated-driving functions. However, the firms have yet to unveil any products. BEHIND IN CHINA Mercedes is playing catch-up in China on both electric vehicles and smart-driving software, which is led by Tesla, Nio and Xiaomi. Only 3% of Mercedes' 443,764 cars sold in China this year were EVs, according to the China Association of Automobile Manufacturers, fewer than one-tenth of Nio's sales. Automakers in China are locked in an autonomous-driving race, with BYD hiring thousands of engineers to ramp up its in-house development of such software. Nio, Xpeng and Xiaomi are developing their own ADAS chips that could achieve better smart-driving performance with their EVs. The trend has also helped Chinese ADAS suppliers Momenta, Huawei and DeepRoute.ai quickly amass automaker clients and embed several vehicle models within their systems. Momenta's clients include BYD, SAIC and Audi in China. Momenta's largest automaker investor is China's SAIC while other backers include General Motors and Toyota. (Reporting by Zhang Yan, Brenda Goh, Victoria Waldersee and Christina Amann; Editing by Rod Nickel)
[2]
Mercedes to use Momenta software in 4 models, accelerate China comeback, sources say
Mercedes-Benz is betting on China's Momenta to help it win back market share in the world's biggest auto market, with plans for fresh investment and at least four future models to use the autonomous driving startup's software, three sources with knowledge of the matter said. The plans, which have not been previously reported, will make autonomous-driving developer Momenta the first Chinese supplier picked by Mercedes to be a primary provider of a key technology and selling point for its products, as intense competition and technological innovation in China force Western automakers to rethink their supply-chain strategies. The German premium automaker has since 2017 had an investment in Momenta but the two companies have yet to publicly announce jointly developed products. In the years since, the Chinese firm has emerged as one of China's leading suppliers of advanced driving assisted system (ADAS) features similar to Tesla's full self driving that can navigate urban traffic with human drivers' supervision. Mercedes intends to make a fresh $75-million investment in Momenta and may invest more as a cornerstone investor in Momenta's initial public offering scheduled in the first quarter of 2025, the sources said. It has chosen Momenta as its ADAS supplier in four models to be launched in China from 2025 to 2027 and is discussing internally whether to use Momenta software in more Chinese models beyond 2027, one of the people said. It is also working with Momenta on preliminary plans to use the Chinese supplier's technology in Mercedes models outside China, two of the people said. Mercedes and Momenta declined to comment. Mercedes has also been exploring ADAS options with U.S. artificial-intelligence chipmaker Nvidia as part of a partnership announced in 2020, when they said they would develop Mercedes-Benz vehicles with upgradable automated-driving functions. However, the firms have yet to unveil any products. Mercedes is playing catch-up in China on both electric vehicles and smart-driving software, which is led by Tesla, Nio and Xiaomi. Only 3% of Mercedes' 443,764 cars sold in China this year were EVs, according to the China Association of Automobile Manufacturers, fewer than one-tenth of Nio's sales. Automakers in China are locked in an autonomous-driving race, with BYD hiring thousands of engineers to ramp up its in-house development of such software. Nio, Xpeng and Xiaomi are developing their own ADAS chips that could achieve better smart-driving performance with their EVs. The trend has also helped Chinese ADAS suppliers Momenta, Huawei and DeepRoute.ai quickly amass automaker clients and embed several vehicle models within their systems. Momenta's clients include BYD, SAIC and Audi in China. Momenta's largest automaker investor is China's SAIC while other backers include General Motors and Toyota.
[3]
Mercedes to use Momenta software in 4 models, accelerate China comeback, sources say
SHANGHAI/BERLIN, Nov 29 (Reuters) - Mercedes-Benz (MBGn.DE), opens new tab is betting on China's Momenta to help it win back market share in the world's biggest auto market, with plans for fresh investment and at least four future models to use the autonomous driving startup's software, three sources with knowledge of the matter said. The plans, which have not been previously reported, will make autonomous-driving developer Momenta the first Chinese supplier picked by Mercedes to be a primary provider of a key technology and selling point for its products, as intense competition and technological innovation in China force Western automakers to rethink their supply-chain strategies. The German premium automaker has since 2017 had an investment in Momenta but the two companies have yet to publicly announce jointly developed products. In the years since, the Chinese firm has emerged as one of China's leading suppliers of advanced driving assisted system (ADAS) features similar to Tesla's (TSLA.O), opens new tab full self driving that can navigate urban traffic with human drivers' supervision. Mercedes intends to make a fresh $75-million investment in Momenta and may invest more as a cornerstone investor in Momenta's initial public offering scheduled in the first quarter of 2025, the sources said. It has chosen Momenta as its ADAS supplier in four models to be launched in China from 2025 to 2027 and is discussing internally whether to use Momenta software in more Chinese models beyond 2027, one of the people said. It is also working with Momenta on preliminary plans to use the Chinese supplier's technology in Mercedes models outside China, two of the people said. Mercedes and Momenta declined to comment. Mercedes has also been exploring ADAS options with U.S. artificial-intelligence chipmaker Nvidia (NVDA.O), opens new tab as part of a partnership announced in 2020, when they said they would develop Mercedes-Benz vehicles with upgradable automated-driving functions. However, the firms have yet to unveil any products. BEHIND IN CHINA Mercedes is playing catch-up in China on both electric vehicles and smart-driving software, which is led by Tesla, Nio (9866.HK), opens new tab and Xiaomi (1810.HK), opens new tab. Only 3% of Mercedes' 443,764 cars sold in China this year were EVs, according to the China Association of Automobile Manufacturers, fewer than one-tenth of Nio's sales. Automakers in China are locked in an autonomous-driving race, with BYD hiring thousands of engineers to ramp up its in-house development of such software. Nio, Xpeng and Xiaomi are developing their own ADAS chips that could achieve better smart-driving performance with their EVs. The trend has also helped Chinese ADAS suppliers Momenta, Huawei (HWT.UL) and DeepRoute.ai quickly amass automaker clients and embed several vehicle models within their systems. Momenta's clients include BYD (002594.SZ), opens new tab, SAIC (600104.SS), opens new tab and Audi in China. Momenta's largest automaker investor is China's SAIC while other backers include General Motors (GM.N), opens new tab and Toyota (7203.T), opens new tab. Reporting by Zhang Yan, Brenda Goh, Victoria Waldersee and Christina Amann; Editing by Rod Nickel Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Autos & TransportationADAS, AV & SafetySustainable & EV Supply ChainEV StrategyProducts
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Mercedes-Benz plans to invest in and use Momenta's autonomous driving software in four future models, marking a significant shift in its strategy to regain market share in China's competitive auto market.
Mercedes-Benz's Strategic Partnership with Momenta
Mercedes-Benz is making a bold move to regain its foothold in the Chinese automotive market by partnering with Momenta, a leading Chinese autonomous driving startup. This collaboration marks a significant shift in Mercedes' strategy, as it seeks to compete in the rapidly evolving landscape of electric and smart vehicles in China 123.
Investment and Technology Integration
The German luxury automaker plans to invest $75 million in Momenta, with the possibility of becoming a cornerstone investor in the startup's initial public offering scheduled for the first quarter of 2025 1. This investment builds upon Mercedes' existing stake in Momenta, which dates back to 2017 2.
Mercedes has chosen Momenta as its primary supplier for Advanced Driver Assistance Systems (ADAS) in four models set to launch in China between 2025 and 2027 3. The company is also considering expanding the use of Momenta's software to additional Chinese models beyond 2027 and potentially integrating the technology into Mercedes vehicles outside of China 12.
Catching Up in the Chinese Market
This partnership comes as Mercedes-Benz faces significant challenges in the Chinese market, particularly in the electric vehicle (EV) and smart-driving software segments. The company's EV sales in China have been lagging, with only 3% of its 443,764 cars sold in the country this year being electric vehicles 3. This figure pales in comparison to competitors like Nio, whose EV sales are more than ten times higher 1.
The Autonomous Driving Race in China
The collaboration with Momenta positions Mercedes-Benz in the intense autonomous driving competition unfolding in China. Local automakers and tech companies are investing heavily in this technology:
- BYD is ramping up its in-house development by hiring thousands of engineers 2.
- Nio, Xpeng, and Xiaomi are developing their own ADAS chips for enhanced smart-driving performance 3.
- Chinese ADAS suppliers like Momenta, Huawei, and DeepRoute.ai are rapidly expanding their client base among automakers 1.
Momenta's Growing Influence
Momenta has emerged as a key player in China's autonomous driving sector, offering ADAS features comparable to Tesla's Full Self-Driving capability 2. The company's client roster includes major automakers such as BYD, SAIC, and Audi in China 3. Momenta has also attracted investments from global automotive giants like General Motors and Toyota 1.
Implications for Mercedes-Benz's Global Strategy
While Mercedes-Benz continues to explore ADAS options with U.S. AI chipmaker Nvidia, the partnership with Momenta represents a significant pivot towards Chinese technology suppliers 2. This move reflects the growing importance of the Chinese market and the need for Western automakers to adapt to local technological advancements and consumer preferences 3.
As Mercedes-Benz works to close the gap in electric vehicle sales and smart-driving technology in China, its collaboration with Momenta could prove crucial in revitalizing its position in the world's largest automotive market 123.
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