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BMW, Daimler Suspend Next-Gen Automated Driving Partnership

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BMW AG (BAMXF - Free Report) and Daimler AG’s (DDAIF - Free Report) Mercedes-Benz brand recently arrived at a mutual agreement to temporarily put on hold their partnership to jointly develop next-generation automated driving technology.

The partnership, announced last July, was aimed at developing driver assistance systems, fully automated driving on highways, and automated parking, with the first cars fitted with the technology scheduled for a 2024 launch. However, the companies announced that they would suspend their alliance indefinitely citing exceeding costs and unfavourable economic circumstances. The two firms also stressed that this cooperation might be resumed at a later date.

The German automakers have each agreed to focus on their existing development paths, which could include working with new or existing partners. While BMW is part of a partnership with Intel, Mobileye, Fiat Chrysler Automobiles and Ansys, last year Daimler and Bosch jointly launched a robotaxi pilot project in San Jose.

Further, BMW aims to focus on the development of powerful sensors and computing power, and its modular system. Mercedes-Benz, meanwhile, will continue its focus on decarbonisation and digitalisation.

In the meantime, BMW and Mercedes-Benz will continue to work together in other areas, including their 2015 alliance with Audi on the consortium of ‘Here’ — a mapping and location data company. In addition, BMW and Daimler will continue to work on the merger of short-term rental services Car2Go and DriveNow in a bid to expand their footprint in the developing mobility market.

Zacks Rank & Stocks to Consider

While BMW currently carries a Zacks Rank #4 (Sell), Daimler is a Zacks Ranked #3 (Hold) stock.

Shares of BMW and Daimler have depreciated 21.3% and 25.8%, respectively, year to date, wider than the industry’s decline of 12.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same sector are Tesla, Inc. (TSLA - Free Report) and Arcimoto, Inc. (FUV - Free Report) , both carrying a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Shares of Tesla have appreciated 139.3%, year to date, compared with the industry’s rise of 38.9%.

Shares of Arcimoto have surged 121.7%, year to date, as against its industry’s decline of 13.4%.

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