Mixed signals in the L3 automated driving market
- SBD Automotive
- 5일 전
- 3분 읽기
업데이트되었습니다: 1 일 전
The global race towards Level 3 automated driving is showing signs of uncertainty and strategic shifts among major automakers.
According to reports from August 2025, Stellantis has paused its STLA AutoDrive program, an L3 automated driving initiative first announced in February 2025. This decision reflects a more cautious industry tone as companies re-evaluate timelines and value propositions. In contrast, General Motors (GM) has publicly reaffirmed its commitment to L3 automation. After years of contemplationGM recently announced plans to launch its Eyes Off Driving system in 2028 with the Cadillac Escalade IQ.
Ford, after acquiring Argo AI and integrating it with its in-house Latitude AI division, is signalling strong intent to develop L3 technology internally. The company is expected to unveil its own roadmap for L3 systems in the near future.
Meanwhile, Tesla continues to develop its Full Self-Driving (FSD) software, where the natural next step from its supervised FSD is expected to be unsupervised FSD for urban environments effectively an L3 or higher system.
How OEM strategies are evolving
Automakers’ strategies for L3 automation are being shaped by a mix of market dynamics, economic pressures, and consumer sentiment. Several key factors are influencing these shifts:
Market volatility
Trade tariffs, low sales volumes and intensified competition from Chinese automakers are forcing global OEMs to reassess investment priorities in high-cost technologies like L3 automation.
Questionable value proposition
L3 systems offer limited use cases, often restricted to specific highway conditions while adding significant cost. This challenges the perceived value-to-customer ratio, especially when L2+ systems already deliver compelling hands-off driving experiences.
Development cost vs. deployment scale
High R&D costs, coupled with limited rollout across only a few premium vehicle models, make profitability difficult to achieve.
Liability and brand risk
Under UNECE Automated Lane Keeping System (ALKS) regulations, legal liability in the event of an accident shifts from the driver to the OEM, exposing brands to potential reputational damage.
Scalability challenges
Mercedes-Benz’s Drive Pilot, launched in 2022 (Germany) and 2023 (U.S.) for the S-Class and EQS, illustrates this issue - it remains confined to high-end models and has yet to scale to mass-market vehicles.
“OEMs are navigating a perfect storm: soaring development costs with minimal feature rollout, liability risks, scalability challenges, tariff-driven volatility, and relentless competition from China. The automotive industry stands at a critical inflection point; adapt, innovate, or risk being left behind.”
Varun Krishna Murthy
Consulting Manager- EMEIA
SBD Automotive
While SBD forecast indicates slow uptake for L3 over the next few years, our recent consumer survey studies on L3 automated driving and L2+ hands-off assisted driving reveal that, across awareness, education, subscription, and usage, consumers perceived significantly higher value in the L2+ hands-off driving feature.
These contrasting approaches highlight an industry still searching for the right balance between ambition and realism. While OEMs continue to promote the promise of hands-free mobility, many are quietly recalibrating expectations in the face of economic pressure and cautious consumers. The market’s next phase will likely reward those who can bridge the gap between technological capability, affordability, and driver trust, rather than those chasing autonomy for its own sake.
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