What Does the Launch of BMW’s Personal Pilot Tell Us about the Emerging Level 3 Autonomous Driving Market?

Within a year of Mercedes-Benz’s launch of the Level 3 DRIVE PILOT 2.0, BMW will introduce the industry’s second Level 3 autonomous driving system on the new 7 Series in 2024. In the German market, customers of the 7 Series equipped with the Personal Pilot system will be able to enjoy hands-free and eye-free driving on certain roads up to speeds of 60 Kilometers per Hour (km/h) (37 Miles per Hour (mph)). BMW has crafted a suite of related connected services for “secondary in-vehicle activities” that will be available to the driver when the vehicle is operating in Level 3 mode, including Video on Demand (VOD) streaming on the main cockpit display and email editing for productivity purposes. While limited in geographic availability, road coverage, and operational speed range, the launch of BMW’s Personal Pro Pilot takes the core value proposition of autonomous driving—handing time back to the driver—from concept to reality.

With two Level 3 systems now productized, comparing these two offerings offers critical insights into the common enabling technologies, and the emerging avenues for differentiation between unsupervised autonomous experiences within limited Operational Design Domains (ODDs).

From an enabling technology perspective, the BMW and Mercedes-Benz products are very similar, suggesting that the industry has settled upon the most cost-effective approach to delivering eyes-off highway driving. Both systems add a single Light Detection and Ranging (LiDAR) sensor to the 360° camera-radar sensor fusion already employed in their Level 2+ products. Additionally, both systems leverage the HERE High-Definition (HD) map product, confirming the relevance of HD/Autonomous Vehicle (AV) maps in eyes-off automation. Finally, both systems operate within a comparable ODD, being limited to certain highway routes, and only operable up to speeds in the 60 km/h range.

The biggest distinction between the two systems is the business model employed by the two competing Original Equipment Manufacturers (OEMs). Whereas Mercedes-Benz has pioneered a subscription business model, charging US$2500 per year through the Mercedes me connect store, BMW is sticking with a more conventional one-off Point of Sale (POS) purchase approach, pricing the system at €6,000. Therefore, Mercedes-Benz will need its customers to continue subscribing for around 2.5 years to extract the same revenue from its Level 3 system as BMW will gain at the POS. However, the subscription-based approach will enable Mercedes-Benz to access AV revenue after the 2.5 year period, and more importantly beyond the first owner of the vehicle, with each DRIVE PILOT 2.0-enabled vehicle shipped growing an installed base of monetizable vehicles for Mercedes-Benz.

Mercedes-Benz and BMW are fierce rivals in the premium vehicle segment, and have typically competed according to factors such as the performance of their engines, the comfort of their drive, and the dynamics of their vehicles. With both now pioneering unsupervised autonomous highway driving, new battle lines are emerging, creating new avenues for these two OEMs to differentiate from one another, which will ultimately shape the competitive dynamics of the Level 3 autonomous driving market.

• ODD—Road Coverage: Both BMW’s and Mercedes-Benz’s Level 3 systems are limited to certain road types in select regions. Delivering the eyes-off experience in more road types will be a key differentiator, and could attract more consumers by increasing the number of driving situations that can be automated.
• ODD—Ambient Lighting and Weather Conditions: Another ODD-related competition avenue is through system robustness to ambient weather and lighting. BMW claims that its Level 3 system is the first that can also operate in the dark. Once again, delivering the eyes-off experience in a broader set of driving situations will attract more customers, particularly if systems are delivered at a comparable cost.
• ODD—Speed Range: Both the Mercedes-Benz and BMW systems currently operate at speeds up to around 40 mph, with the Mercedes-Benz system expected to increase to 80 mph operations in the coming years. Support for a higher speed limit will expand the scenarios in which drivers can disengage beyond traffic jams.
• Handover Human-Machine Interface (HMI): The handover process from autonomous operation with a disengaged driver to human operation is complex, with a robust process to re-engage the driver a key component in Level 3 driving. Generally, having more time to extract the driver from their other activities and back into the driving process makes the safety case easier to deliver, but does so at the cost of consumer convenience. Developing a handover process that quickly and safely re-engages the driver will improve the consumer experience of Level 3 automation.
• Reclaimed Time: Unsupervised autonomous driving hands back time to the driver (the so-called 25th hour). Providing new, more immersive ways for consumers to enjoy this extra time is a critical new avenue for competition, which BMW has effectively targeted by providing VOD streaming and productivity tools. Automakers must compete, not only in terms of how effectively they automate the driving process, but also in how they exploit the new time opened up through autonomous operation through unique digital experiences within their branded environment. This goes to the very heart of OEM brand identity in the autonomous future—what will the cabin become when driving is an occasional task or a thing of the past?
• Over-the-Air (OTA) Update Frequency: None of the competition avenues described above need to remain static throughout the vehicle lifecycle. Combining future-proofed hardware platforms with OTA software updates can expand the ODD of the Level 3 system, accelerate the handover process, and augment the immersive in-cabin experiences over time. A higher frequency of updates will be particularly important in the context of subscription business models, where continued improvements in the consumer experience will be key to minimizing churn and maximizing recurring revenue.