Mercedes-Benz Chief Technology Officer Joerg Burzer stated at a media roundtable that the company was among the first to introduce L3 autonomous driving technology, but its practical usability proved very limited.
As a result, Mercedes-Benz has decided to adjust its strategy, prioritizing the development of a more comprehensive L2 advanced driver assistance system, with plans to skip L3 entirely and move directly toward L4 autonomous driving in the future.
The core limitation of the system is that vehicle speed cannot exceed 64 km/h, making it essentially usable only in congested sections and unable to meet normal highway driving needs.
Burzer remarked, "Sometimes, when technology is launched too early, you find yourself having to re-examine what customers actually need."
However, the market has not entirely embraced Mercedes-Benz's reflection on its technology roadmap.
On social media, many netizens mocked the company, saying things like "It was never about certification, it's about being usable every day 鈥?Mercedes-Benz is indeed slow on this," "If L3 doesn't work, how will L4?" "It's just that their technology is falling behind," and "Not easy to use"...
In response, Mercedes-Benz officially stated, "Currently there is no information about L3 autonomous driving technology being launched in the Chinese market. What has been deployed in China is Mercedes-Benz L2++ advanced driver assistance, and some Mercedes-Benz models are already equipped with the Momenta R7 driving assistance system, featuring parking-space-to-parking-space assisted driving functionality."
Regarding netizens' views that Mercedes-Benz's "autonomous driving technology has fallen behind," the representative said, "For electric vehicles, the launch of new models may drive related research, but Mercedes-Benz previously focused mainly on fuel vehicles. In recent years, we have been gradually rolling out intelligent driving features for electric vehicles, conducting testing and market launches one by one."
Abandoning L3 Autonomous Driving, Admitting Limited Practicality
In 2023, Mercedes-Benz's Drive Pilot made waves as the first system to receive L3 autonomous driving approval in the United States. Three years later, however, the new Mercedes-Benz S-Class launched in the U.S. market without this technology equipped.
Recently, Mercedes-Benz CTO Joerg Burzer openly acknowledged at a media roundtable that the L3 autonomous driving the brand launched in its early years had limited practicality. Mercedes-Benz has adjusted its technology roadmap to prioritize refining high-level L2 assisted driving, with plans to skip L3 and sprint directly toward L4 in the future.
He stated bluntly, "Being first to launch new technology doesn't mean it can meet consumers' actual needs."
It is understood that Mercedes-Benz's L3 autonomous driving system DRIVE PILOT was once the flagship of the global autonomous driving industry. At the end of 2021, it obtained approval from Germany's Federal Motor Transport Authority, becoming the world's first mass-production L3 system legally permitted on public roads. In 2023, it arrived in Nevada and California, making Mercedes-Benz the first automaker in the United States to receive L3 autonomous driving certification, once dubbed by media as the "global pioneer of L3."
Public information shows that the reason it could obtain L3 autonomous driving system certification is that during the operation of Mercedes-Benz's DRIVE Pilot, drivers can take their hands off the wheel and achieve ACC adaptive cruise control functions, such as stopping and starting in congested sections and avoiding fast-approaching vehicles. Additionally, the system can achieve automatic parking in completely unmanned scenarios, such as automatically finding parking spaces, planning routes, and actively cutting power, all of which have been realized in production vehicles.
But behind the seemingly near-autonomous driving experience are stringent usage conditions. The system's maximum speed is only 64 km/h, and it can only be activated on congested highway sections, during daytime with clear weather, and in areas covered by high-precision maps.
While the experience is mediocre, Drive Pilot's optional price in Germany is as high as 5,000 to 9,000 euros, and in the U.S. market, it requires an annual subscription fee of $2,500.
According to reports, due to low usage demand and infrequent use, the new S-Class released by Mercedes-Benz in January this year no longer offers Drive Pilot, and the facelifted EQS has also removed it.
Currently, Mercedes-Benz is focusing on developing the MB.DRIVE ASSIST PRO system, which provides full-journey driving assistance from start to finish. Burzer predicts that L4 autonomous driving will not enter mass production until after 2030, at which point it will likely be rolled out gradually.
Zhang Xiang, a visiting professor at Huanghe Science and Technology College, told the media, "Intelligent driving has become a focal point of competition among automakers. Whichever company achieves a breakthrough in intelligent driving technology can easily gain traffic, with an obvious effect on brand marketing and sales. As a long-established global automaker, Mercedes-Benz is currently under significant pressure amid the new energy wave. Having long focused on fuel vehicles, its sales in the Chinese market have dropped sharply, and it urgently needs to reorganize its intelligent driving strategy."
He further stated, "The L3 intelligent driving solution Mercedes-Benz previously launched is now essentially declared a failure. This system only landed in a small number of German cities and in Nevada and California in the U.S., with high pricing and limited usable scenarios, and ultimately is no longer offered. Moreover, the latest technology in the Chinese market now is urban NOA (urban navigation assisted driving), and Mercedes-Benz doesn't have these features."
As for Mercedes-Benz's plan to skip L3 and move directly into L4 autonomous driving, Zhang Xiang believes it carries significant risks. "It can be said that Mercedes-Benz's current intelligent driving technology lags considerably behind Chinese automakers. If its L3 technology were good, why would it be discontinued? For Mercedes-Benz to jump directly to L4, I don't think there will be massive investment, because its own technological foundation is relatively backward, and the investment risk is high. By then, a lot of money could be burned without the technology landing, bringing a heavy burden to the company. Additionally, Mercedes-Benz is currently facing fierce industry competition and involution. Determining the L4 technology direction is a good thing, but the challenges are indeed enormous."
China Market Quarterly Sales Drop 31%
Recently, Mercedes-Benz Group released its third-quarter financial report for 2026. According to media reports, during the earnings call, Deutsche Bank analyst Tim Rokossa used the phrase "death by a thousand cuts" to describe Mercedes-Benz's market performance in China over the past three years.
In the third quarter, Mercedes-Benz Group achieved revenue of 30.698 billion euros, down 5% year-on-year; operating profit of 1.773 billion euros, up 136% year-on-year; and net profit of 1.518 billion euros, up 28% year-on-year. However, the group's adjusted operating profit was 1.775 billion euros, down 15% year-on-year.
In terms of sales volume, in the third quarter, Mercedes-Benz passenger car global sales were 407,200 units, down 8% year-on-year. Among them, European market sales were 168,700 units, up 5% year-on-year; North American market sales were 83,200 units, up 4% year-on-year; and Chinese market sales were 86,800 units, down 31% year-on-year. In the first three quarters, cumulative sales in the Chinese market were 297,000 units, down 29% year-on-year, while the European and North American markets grew 5% and 11% respectively.
From this perspective, the Chinese market has become the "disaster zone" dragging down Mercedes-Benz's overall performance. Mercedes-Benz also explicitly mentioned in its financial report that "intensified competition in the Chinese market and pressure on the local market environment are important factors affecting passenger car business sales."
According to reports, during Mercedes-Benz's third-quarter earnings call, Mercedes-Benz Group CEO Ola Kaellenius, discussing challenges in the Chinese market, said, "This year the Chinese auto market has shrunk by more than 20%, and the high-end car market has been declining for more than three consecutive years. The high-end market has been hit particularly hard, with wealthy individuals and business operators tightening their spending, which has significantly impacted Mercedes-Benz because the high-end market is one of the business areas contributing the most profit to the company."
He also believes, "Currently more than 100 companies are engaged in fierce competition in the Chinese market, and this competition is driving down prices and profitability levels across the entire market."
Kaellenius stated, "Faced with the continued weakening of the Chinese market, especially the high-end market decline exceeding expectations, Mercedes-Benz is conducting a 360-degree comprehensive review of its China business, covering brand, brand influence, product portfolio, market strategy, production, procurement, and technology, among other aspects."
He also emphasized that China remains an important market for Mercedes-Benz's global business, and Mercedes-Benz will not set the Chinese market aside, but it needs to find a suitable operating scale and long-term strategic plan for the current market environment.
Zhang Xiang told the media that the challenges Mercedes-Benz now faces in the Chinese market are backed by a series of systemic issues: First, China's policies on fuel vehicles are tightening year by year, and luxury brands like Mercedes-Benz produce fuel vehicles with larger engine displacement and higher fuel consumption, which may generate more negative credits, putting pressure on them. Second, Mercedes-Benz started late in new energy, previously mostly converting fuel vehicles to electric, without original development. Now, technology iteration in the new energy sector has gone through multiple generations, but Mercedes-Benz's gap remains quite obvious.
He gave examples: "In terms of range and charging, the latest technology from Chinese automakers is flash charging, while Mercedes-Benz's charging times are generally quite long; in intelligent driving, many Chinese automakers already have urban NOA functionality, with cars priced at 80,000 to 90,000 yuan equipped with lidar and urban NOA, while Mercedes-Benz cars costing 300,000 to 400,000 yuan may not have urban NOA; in automotive software, digital cockpits, and user experience, Mercedes-Benz also cannot keep up."
At the same time, Chinese consumers and car owners are trending younger, with car-buying philosophies different from the older generation. They do not blindly worship international brands, conduct careful research when buying cars, and do not treat BBA brands like Mercedes-Benz as their only choice.
Zhang Xiang commented, "Mercedes-Benz was originally a luxury brand, but many Chinese brands have already entered this segment, such as BYD's Denza and Yangwang, as well as NIO, Li Auto, and even Xiaomi, all of which have entered the market segment above 300,000 yuan, squeezing Mercedes-Benz's space. This has led to Mercedes-Benz lacking new energy products to compete in the market, with fewer and fewer loyal users of old products, ultimately resulting in poor performance and declining sales."
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