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Enhanced System in New Vehicles
As part of the collaboration, Mercedes, one of the first automakers, integrates the latest Automotive AI Agent system from Google Cloud. The goal is to enhance the conversational abilities of the MBUX virtual assistant in Mercedes cars to provide drivers with more personalized and detailed responses. Google utilized its Gemini AI model, revealed on January 13, 2025, to create the agent, specifically designed for the automotive sector. Drivers will be able to ask various questions, such as suggestions for specific restaurants along the route to their destination, with follow-up questions like reviews or dishes recommended by the chef. The system can handle complex conversations and remember previous interactions during the drive, making it more user-friendly and intuitive. Tasks are possible thanks to the integrated Google Maps platform, which provides real-time data access. According to Google’s press release, the enhanced MBUX will debut in the latest Mercedes CLA lineup at the end of 2025. This move prepares the automaker to offer customers a smoother experience, connecting cutting-edge technology with practical in-car applications.
Expanded Existing Partnership
The collaboration between the two companies began back in 2023 when Mercedes decided to transform the digital experience for drivers. The German automaker was the first manufacturer to develop a branded navigation system leveraging the powerful real-time data and capabilities of the Google Maps platform, covering hundreds of millions of locations globally. In addition to maps, Cloud and YouTube were integrated into the Mercedes-Benz Operating System (MB.OS). Last year, Google’s AI services were also extended to call centers and online stores, aiming to replicate in-store shopping and enhance the overall experience.
Amazon to Use the Vehicles
The quality of Mercedes vehicles is also evidenced by Amazon’s order for 200 fully electric eActros 600 trucks. These will be delivered by Daimler, with Mercedes as the major shareholder, representing the largest order of Mercedes trucks. Amazon will integrate the trucks this year in Germany and the UK. With a 500-kilometer range per charge, they will be used for long-haul routes. To support the electric trucks, Amazon is building a 360-kilowatt fast-charging network at its sites, ensuring efficient charging that complies with legal driver breaks.
Sales Declined Last Year
Last year was challenging not only for Mercedes but the entire sector, facing a sales decline. This was largely due to decreased demand caused by the poor economic situation, particularly in the world’s largest economies. Overall, Mercedes car sales fell by 3% year-on-year. In the fourth quarter of 2024, they increased slightly by 1% compared to the same period the year before. The worst hit were the exclusive and entry-level models, which saw a 14% year-on-year decline in 2024, while base model sales increased by 6%. The US was a successful market, whereas Europe and Asia, particularly Germany and China, dragged sales figures down. Sales of battery electric vehicles plummeted by 23% last year, 26% quarterly. This presents a significant challenge as stricter EU CO2 emission targets come into effect, which could lead to financial penalties. After two annual target adjustments, the automaker announced further plans to reduce costs and increase profitability. Similar strategies were implemented by other European companies.
Stock Price Movements
Mercedes shares have experienced considerable volatility over the past five years. As of January 15, 2025, their price was approximately 58 USD, a value from more than a year ago. The shares reached a record high in October 2021, nearing 100 USD, followed by a sharp decline. In the following years, they somewhat stabilized, trading between 50 USD and 80 USD. Year-on-year, this represents a 16% decrease in share value, while from a five-year perspective, it marks a more than 41% increase.*
Source: Investing.com*
Conclusion
Mercedes continues to adapt to the evolving automotive environment, combining its traditional strengths in luxury with innovative technologies. The partnership with Google exemplifies its commitment to enhancing user experiences through advanced navigation and AI features. Despite global market challenges, the company is determined to maintain its competitive edge.
* Historical data is not a guarantee of future performance.
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Sources:
https://blog.google/feed/mercedes-google-cloud-automotive-ai-agent/
https://group.mercedes-benz.com/company/news/mercedes-benz-and-google.html
https://group.mercedes-benz.com/company/news/sales-2024.html
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