According to a newspaper report, Mercedes-Benz is adjusting its strategy on autonomous driving.

The automaker is apparently putting its plans for systems that enable hands-free driving on hold for now, the "Handelsblatt" (Monday edition) reported in advance, citing company sources. In the revised flagship S-Class sedan, which Mercedes plans to unveil at the end of January, SAE Level 3 driving will reportedly no longer be offered. Instead, Mercedes will initially focus on automated driving assistants that require the driver to remain attentive at all times.

The background to this decision is high production costs coupled with low demand, the newspaper further reported. However, the company plans to continue developing the system and to offer it again in future models. According to "Handelsblatt," Mercedes CEO Ola Källenius said that the company could combine offerings so that customers could in the future drive automatically both in city traffic and on highways. Rival Ford announced on Wednesday that it would bring a Level 3 system to market in 2028. Customers will have to pay extra for this, a senior Ford executive told Reuters, without specifying a price.

The automotive industry has developed the SAE standard for automated driving. Level 1 covers basic assistance functions such as cruise control or lane-keeping assistance. At Level 2, the system can take over steering, acceleration, and braking, but the driver must remain alert and able to take control at any time. Level 3 allows the driver to disengage from the traffic situation in certain circumstances, though they must remain ready to intervene. Level 4 vehicles operate autonomously in designated areas. Level 5 refers to full automation, where a vehicle can complete any journey under all conditions without human intervention.

(Reported by Scot W. Stevenson; For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for business and markets).)