Mercedes-Benz won’t follow Tesla into the robotaxi game

Mercedes-Benz CTO Markus Schäfer is energized by his visit to Silicon Valley. The executive is at the automaker’s Sunnyvale, California, research and development center to meet with his team and local tech companies. 

“Very, very interesting discussions were had about potential partnerships in the future,” Schäfer tells The Verge as we sit down for a chat about the future of Mercedes-Benz. The company is in the midst of a supercharged transformation into an EV platform while working to become the first automaker to have a passenger vehicle for sale in the United States with Level 3 driver-assistance technology. The system allows the driver to not pay attention to the road or control the vehicle under very select circumstances — typically on the highway.  

It was another reason for Schäfer to make the trip to California. Mercedes wants to be able to launch its Drive Pilot feature in California, but making that a reality requires regulatory approval. The executive met with officials in Sacramento. The automaker’s goal is transparency with regulators and has gotten feedback from the DMV, California Highway Patrol, and the National Highway Traffic Safety Administration about the system. 

“They understand technology, the sense of redundancy [in computing], our safety philosophy, and even how we educate customers on this Level 3 system. So a very important milestone here, meeting with the regulators, explaining the system, and preparing the application,” the CTO said.

Mercedes’ Drive Pilot system’s Level 3 features would allow drivers under certain circumstances (on the highway under a certain speed) to remove their hands from the steering wheel and stop paying attention to the road. Nothing else on the market allows drivers to essentially check out from the driving experience. The closest thing we have in the United States right now are hands-free systems from BMW, Ford, and GM. All of them require the driver to continue to pay attention. 

Yet potentially being the first to sell a passenger vehicle that can drive itself (again, in certain circumstances on the highway) does equate to a jump into the ride-hailing mobility space. Tesla CEO Elon Musk has said that self-driving Teslas could earn money for their owners and, at one point, announced that there would be a million self-driving Tesla taxis on the road in 2020. 

That hasn’t happened yet, and for Mercedes, that’s not even a goal — at least not anymore. “We thought in 2016 or 2017, we could solve the robotaxi problem quite quickly,” Schäfer said. But committing to both a ride-hailing solution and a passenger driver-assistance solution was expensive. Something had to be scrapped, and it was the taxis driven by robots. 

As Mercedes works toward Level 3 and beyond, other OEMs and their subsidiaries are going through a shake-up that seems to have landed them along the same path. The Ford and Volkswagen-backed Argo AI shuttered last week. Employees were reportedly told that some would be offered jobs by either Ford or Volkswagen, while others would receive a severance package. The technology would also be split between the two companies, although it’s not known which automaker will get what. During a third quarter earnings call, Ford announced that it would be focusing on Level 2 and Level 3 driver-assistance systems instead of vehicles that could be used as robotaxis.

Ironically, Mercedes has been providing vehicles to human-driven taxis for decades in Europe. It will continue to take part in that lucrative market, but it’s definitely not the automaker’s priority to get into the robotaxi world, according to Schäfer. The CTO doesn’t see the benefit of a self-driving taxi with a Mercedes star. “Would you wait five minutes longer for a Mercedes robotaxi? I don’t think so,” Schäfer said. 

Tesla might not have to worry about battling the German automaker in the robotaxi game (whenever that happens), but it should be concerned about Mercedes’ recent rollout of EVS. 

The EQS, EQE, EQS SUV, and EQB EVs from Mercedes are either already in US showrooms or will be soon. The automaker has been aggressive in its introduction of EVs with more on the way, including the EQE SUV. This current crop of EVs is based on a 400-volt architecture, which means they top off at 200kW while hooked up to compatible DC fast charging stations. 

According to Schäfer, more energy-efficient vehicles are on the way and will be based on the 900-volt EQXX concept vehicle. 

Schäfer says that the automaker’s 2024 platform will feature a new battery chemistry with a silicone anode, a different type of cells, improved packaging density, and new cooling concepts. Meanwhile, the Mercedes-Benz-built motor in the EQXX is more or less the series motor we’ll see in future vehicles. 

There may be one EQXX, but it’s the new baseline for the automaker’s future lineup. The result, according to Schäfer, is that “you will see a dramatic reduction in electric consumption to what’s out there today.” When pressed about what this efficiency means, the CTO said that the company is targeting a 20–30 percent range improvement.  

For those still concerned about the range of electric vehicles, that’s a big boost on the luxury side. Yet Schäfer believes that, as the infrastructure becomes more mature and EVs become more prevalent, there will be customers that opt for a smaller battery pack that actually fits their driving lifestyle to save money.

That’s an important look into the future as the dream of price parity between EVs and gas-powered vehicles starts to slip away. 

“Honestly, all our calculations and intelligence showed it would take a really, really long time to reach parity,” Schäfer said. The CTO noted that it wasn’t there before the supply chain issues, and it’s definitely something that’s not going to happen anytime soon now. That is, unless there’s a breakthrough in chemistry. 

Mercedes plans to go fully electric by 2030. That’s five years ahead of California’s plan to no longer allow the sale of gas-powered vehicles. As the company that invented the modern automobile, Mercedes seems ready for the next step in the evolution of automobiles: a future with more efficient vehicles and actual autonomous functions (in certain conditions). But no robotaxis; it’ll leave that to the anonymous ride-hailing boxes.