Mercedes & Google – A Better Match

Right idea but execution will be everything

• Mercedes will be using Google’s Gemini LLM to power its in-vehicle digital assistant in the 2026 CLA in a move that is much less risky than it sounds.
• Mercedes has been working closely with Google for some time and this update is an extension of a wide-ranging agreement that involves the use of Google Maps as well as Google Cloud services to support sales, marketing and dealership functions.
• The digital assistant was demonstrated a year ago, but the difference is that the assistant is now powered by the Gemini LLM as opposed to the older Google Assistant.
• This should mean that the quality of the voice experience is much improved as RFM research has long concluded that one of the superpowers of LLMs is their ability to use natural language as the man-machine interface.
• This is not Mercedes ceding the digital cockpit to Google but using Google as one of the building blocks for its user experience (MBUX).
• This is similar to what it has done with Google Maps where it has licensed the map but implemented its own navigation and graphical user interface on top of it.
• This does not fill me with confidence as Mercedes has still not figured out that the 2^nd and 3^rd most used buttons on the steering wheel are track forward and track back.
• Instead, for at least 6 years Mercedes has implemented a favourites button that is difficult to use and tricky to program as well as other things that hardly anyone uses.
• Needless to say, I bought my Mercedes despite the digital user experience as Mercedes still makes some of the nicest vehicles available.
• Consequently, I am not confident that Mercedes will do a great job when it comes to the fine-tuning of Gemini for use in Mercedes vehicles which is going to be a problem.
• OEMs and Mercedes in particular, have lost a lot of the digital initiative to Google and Apple as most drivers prefer to use their smartphone for navigation and media consumption than the OEMs experience.
• RFM Research has concluded that a voice-based digital experience represents the best opportunity for OEMs to win back some of the digital initiative and by basing its experience on Google rather than just using Google services, Mercedes has made the right choice.
• However, its voice experience needs to be first-rate to ensure that drivers don’t go back to Android Auto or Apple CarPlay after giving the voice experience a quick try.
• This is how Mercedes can keep users within its own user experience which will mean that when digital services are delivered to the vehicle, they come via the Mercedes storefront rather than Google Play or the Apple App Store.
• This is crucial because RFM Research has concluded that being part of the digital service ecosystem in the vehicle will be essential to bolstering revenues and cash flows from the likely long-term structural weakness of the vehicle market caused by electrification.
• Allowing this to be delivered through Google Play or Apple Appstore will leave Mercedes and the other OEMs unable to earn a share of the revenue and fully exposed to falling vehicle sales.
• Hence, Mercedes appears to have made the right strategic choice, but I remain concerned with its ability to delight its users and prevent them from continuing to defect to the digital ecosystems.