Daimler to “Rightsize” Robo-Taxi Spending

As part of a new cost-cutting initiative, Daimler AG says it will cut spending on developing robo-taxis and redirect its autonomous vehicle efforts toward commercial trucks.

Continuing toward large-scale deployment of self-driving cars would “tie-up a lot of capital” with uncertain revenue potential, CEO Ola Kallenius tells reporters. Noting that Daimler has had a “reality check” about the technology, he says it doesn’t make sense to rush to be first to market.

In addition to high development costs, Kallenius says it has been more challenging than expected to get self-driving cars to navigate complex urban environments. He also points to regulatory hurdles, safety concerns and consumer apprehension.

To help manage its spending on tech development, Daimler has formed partnerships with BMW and Bosch. As part of the BMW collaboration, a combined staff of 1,200 technicians will work on driver-assist and Level 4 automated driving systems.

This summer, Daimler’s commercial truck unit created an Autonomous Technology Group to develop Level 4 self-driving vehicles. The company previously committed to spend €500 million ($556 million) on such programs.

Yesterday Kallenius announced plans to trim Daimler’s Mercedes-Benz Cars managerial team by 10% and cap capital expenditures at 2019 levels. The company also is targeting savings from its commercial truck and van operations.