Mercedes-Benz partners with Momenta to enhance ADAS in China

Mercedes-Benz has made significant plans to regain market share in China, the world's largest automotive market, by selecting Momenta as its primary supplier for advanced driving assistance systems (ADAS). This decision comes as part of Mercedes' strategy to compete with local companies like Tesla, Nio, and Xiaomi, who are leading in the electric vehicle and smart-driving sectors. Since 2017, Mercedes has held an investment in Momenta, but formal collaboration on products has not been announced until now. The German automaker is expected to invest an additional $75 million in Momenta, with potential further investments planned for the company's initial public offering set for early 2025. Over the period from 2025 to 2027, Mercedes-Benz aims to integrate Momenta’s technology into four new vehicle models specifically developed for the Chinese market. In addition to this, discussions are underway regarding the possibility of using Momenta's software in more models beyond 2027 in China and possibly in Mercedes-Benz vehicles outside of the country. This collaboration highlights the growing trend among Western automakers to rethink their supply-chain strategies amid fierce competition and rapid technological innovations driven by Chinese firms. While Mercedes is collaborating with Momenta, it is also exploring ADAS technology through a partnership with the U.S. chipmaker Nvidia, which began in 2020. However, despite these efforts, the companies have yet to produce tangible products from this collaboration. Notably, Mercedes has struggled in China's EV market, where a mere 3 percent of its car sales this year were electric, significantly trailing behind rivals, including Nio, who has seen much better performance in the sector. Other Chinese automakers, like BYD and Xpeng, are expanding their capabilities in autonomous-driving technology, prompting further urgency for Western firms like Mercedes to act swiftly. With the market dynamics shifting quickly in favor of local suppliers, the alliance with Momenta may prove crucial for the German luxury automaker to better position itself in the competitive landscape of China’s automotive market.