Mercedes-Benz revamps S-Class with AI and hybrid tech amid market struggles
Mercedes-Benz has announced a major update to its flagship S-Class, set to begin production in spring 2026. The new model will include over 2,700 fresh components, along with an AI assistant powered by ChatGPT-4o. Meanwhile, the company faces financial and market challenges, with rising costs and declining sales in key regions.
The updated S-Class will bring back physical buttons for essential cabin functions, addressing customer feedback. It will also retain the 4.0-litre V8 biturbo engine while extending the plug-in hybrid's electric range to 100 kilometres. This approach balances tradition with modern efficiency.
In India, Mercedes-Benz has raised prices by up to 2% due to currency fluctuations and higher logistics costs. Despite government investments in infrastructure, these factors have pushed up expenses for buyers.
The company is also shifting its autonomous driving strategy. New partnerships with Nvidia, Uber, and Lumo will focus on Level 4 self-driving technology. Testing is expected to begin in Abu Dhabi by late 2026.
Recent financial news shows a 6.68% drop in Mercedes-Benz's stock price since January, closing at €57.79 on Friday. The stock now trades below its 50-day moving average. Over the past three years, the brand's global luxury market position has weakened compared to BMW and Audi. Sales in China fell by 19.3% in 2025, reaching 1.98 million units, while BMW declined by 12.5%. Chinese rivals like BYD and Geely have surged ahead, with Geely overtaking Volkswagen after a 46.9% growth spike to 2.6 million units.
The S-Class update marks a significant step in Mercedes-Benz's efforts to modernise its lineup. However, the company continues to navigate market pressures, including rising costs and strong competition from Chinese EV manufacturers. The success of the new model and autonomous driving partnerships will be closely watched in the coming years.
