Customer Is King: Why L2++ Might Outpace L3 in the near term

“Customer is king.” It’s a principle the automotive industry knows well. Yet in the rush toward automated driving, OEMs sometimes appear to be racing each other more than listening to the market.

Level 3 (L3) autonomy was positioned as the next big breakthrough. Europe even established regulatory pathways through the United Nations Economic Commission for Europe under UN R157 for Automated Lane Keeping Systems (ALKS). Liability frameworks were clarified, allowing OEMs to assume responsibility under defined operating conditions. Technically, the path seemed clear — yet adoption has slowed.

In Europe, Mercedes-Benz introduced Drive Pilot in the S-Class and EQS, while BMW launched L3 in the 7 Series and i7. While no formal discontinuation has been announced, strong market speculation suggests both OEMs have paused further deployment.

Why?

Today’s L3 systems operate within narrow Operational Design Domains (ODDs) — limited speeds, specific road types, and defined traffic conditions. When offered in ultra-luxury, chauffeur-driven vehicles, the incremental convenience often isn’t compelling enough for customers to justify an additional $8,000–$10,000.

At SBD, our consumer research comparing L2+ hands-off driving with L3 piloted driving was revealing: L2+ achieved 45% higher subscription rates, 37% more frequent usage, and nearly 56% more respondents said it would influence their next car purchase.

This raises key questions:

• Is it liability? Is regulation unclear or restrictive?

• Is it the value proposition — $8–10K for a feature with limited applicability?

• Are there concerns about safety perception or brand image?

• Is it the wrong segment — ultra-luxury, chauffeur-driven vehicles where customers prioritize rear-seat comfort over driving features?

• Are consumers sufficiently educated about L3’s capabilities and limitations? Is the market ready?

  
  

In short, the feature neither generated excitement around headline technology nor delivered sufficient everyday value, leaving customers unwilling to pay a premium.

Meanwhile, other markets are taking a different route. In the U.S., automated driving continues to expand despite the absence of a national L3 framework. Beyond well‑established highway hands‑off systems, Tesla’s supervised FSD and Mercedes‑Benz’s MB DRIVE ASSIST PRO now bring address‑to‑address automation into urban settings still supervised, but increasingly capable. In China, L2++ “address‑to‑address” systems are already part of daily driving, covering highway and city use across a wide range of models.

L2++ is practically the middle ground:

Assisted driving that spans highways and cities, sometimes hands‑on, sometimes hands‑off, but always eyes‑on. These systems handle steering, acceleration, braking, lane changes, and navigation through a much wider range of conditions than early L3 versions, while keeping the driver responsible.

So, when might L3 make a comeback in Europe? Broad adoption before 2028–2030 seems unlikely. ODDs must expand, costs must decrease, and customer demand must be clearly demonstrated. Until then, L3 may remain limited to flagship models or niche fleets.

Meanwhile, L2++ is quietly emerging as the next holy grail. It works across broader conditions, delivers tangible daily convenience, avoids complex liability issues, and scales across segments. With Europe’s DCAS regulation now in force, OEMs can deploy increasingly capable hands-on or hands-off, eyes-on, highway and address-to-address systems without the restrictions of full L3.

Whether OEMs deploy L2+ and L2++ in parallel, stack them hierarchically, or differentiate by segment remains to be seen. What’s clear is that these enhanced assisted systems may define the near-term future of autonomy because they align with what customers actually use and value.

For years, the industry has chased the highest SAE level. But customers don’t buy SAE levels — they buy convenience, trust, and practical everyday value. L3 will likely return in Europe eventually. But until its value proposition strengthens, L2++ may quietly become the workhorse of automated driving.

"In the race for automation, OEMs must remember: it’s not about achieving the highest SAE level first. It’s about delivering the features that customers actually use, appreciate and find valuable across every segment."

Varun Krishna Murthy

Consulting Manager- EMEIA

SBD Automotive

If you’re navigating your L2+, L2++ or L3 roadmaps in Europe, we’d welcome a discussion.

How are you balancing technical ambition with real customer value? To continue the discussion, please email info@sbdautomotive.com to set up a chat.