The race for the autonomous car is on, and how it will shake out is anyone's guess. The future could see fleets of automated taxis, people could subscribe to car companies and use an app to call up their autonomous pods, or buyers could choose to drive on their own, then flip a switch and let the car do the work.

Then again, all of these scenarios could play out, and Mercedes-Benz is taking a two-pronged approach to autonomous cars in the near future, with another approach planned for later.

Motor Authority was recently part of a round-table interview with Mercedes-Benz research and development chief Ola Källenius, who shed some light on the automaker's plans for the autonomous car.

Before we get into Källenius' remarks, a little primer on the levels of autonomy is in order. Levels 0 and 1 have been surpassed, so they aren't important. Level 2 cars are on the road today. A Level 2 car can take control of the car in limited situations, but the driver must be at the ready constantly to back up the system should it fail or when the system can't handle a change in the situation.

2019 Audi A8 laser scanner

A Level 3 car can handle all driving operations in limited situations, but it still needs a driver to take over control, after ample warning, outside of these limited situations. Audi has said the next A8 will offer Level 3 autonomy. A Level 4 car can drive itself at all times but not in all conditions. It may have driver controls for a human to take over, but they are not necessary.

A Level 5 car drives itself at all times in all conditions, including bad weather and on dirt roads. It has no need for driver controls.

Mercedes is working on Level 3 and Level 4/5 cars at the same time.

S-Class to go Level 3

The 2018 Mercedes-Benz S-Class, and the E-Class for that matter, both qualify as Level 2 autonomous cars. Källenius calls the S-Class Level 2 plus, and says "if we would take the inhibitors out, then it could do Level 3 in many, many, many driving situations."

Källenius gave his definition for a Level 3 car: "You can, in general terms say that the Level 3 is a system by which you can let the car drive and you can look the other way and you are not responsible for a certain use-case but not all the time. That technology, we believe, will come and we are working on it."

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However, regulations the world over are standing in the way of developing both Level 3 and Level 4/5 cars. "The regulatory environment is still very heterogeneous both on Level 3 and Level 4 and Level 5. At the moment, we are in discussions with authorities literally around the world to nail that down and try to create as a homogeneous set of requirements as possible because, for consistency reasons and also engineering reasons, the closer those regulatory frameworks are, the better," Källenius explained.

Once the regulatory environment is clear, Mercedes needs to further develop the technology and make it safe. "You would have to add some more on the sensing side and you would also have to add what we think would be the only responsible way of doing it, redundant braking and redundant steering," Källenius said. "The sensing technologies of the future is a blend of cameras, lidars, and radars. Those three layers of sensing basically replaces the eyes and the ears of the human being. It needs to be able to see and hear whatever the human being sees and hears," he noted.

2018 Mercedes-Benz S-Class

Once it feels the technology is up to its high standards, Mercedes will release a Level 3 S-Class. "We are working intensely on that and that is not that far away," Källenius said optimistically.

Full autonomy replaces drivers with robot taxis

Källenius calls the Level 4/5 car a robot car that drives itself. He says Mercedes is concentrating on the taxi market for this type of car simply due to cost. The problem is drivers get replaced by the cars themselves.

"It is phenomenally expensive to do this and the number of sensors you have to put on the car, the computing part and so on, is in tens of thousands of dollars once you get it into production. Where do you have a business case for something like that? You have it in a robot taxi scenario, where you can take a city or part of a city and say, 'OK, I am going to put 100, 200, 300, 1000, whatever robot taxis into this area,' because the amortization comes through not paying the driver. If you think about what the driver earns per year, depending on how many hours that car is in operation, that easily get into the tens of thousands of dollars, so you can have a very quick amortization on a Level 4 or Level 5," he explained.

What are the barriers to Level 4/5 technology? Oddly, Källenius said it's not the infrastructure. "Since you cannot expect the whole world to equip itself with infrastructure to support the first generation of autonomous cars, our approach is the car has to do it on its own. One thing, though, which is absolutely crucial is that you need an HD map, a high-definition map," he said. Mercedes, along with BMW and Audi acquired Nokia's HERE mapping company in 2015. Källenius says that entity is developing HD maps right now.

The timing for Level 4/5? Källenius says 2020-2025 to start, and that Mercedes will grow it through its own mobility services arm car2go or through a mobility services partner.

A third prong and an advantage

Further down the road, Källenius sees a third prong: "You will then have robot taxis in cities and you will have a sophisticated Level 3 system that could be a highway pilot or other use-cases in parallel. Eventually, technologically, these come together...at the point where, we, through economies of scaling and clever engineering, have brought the cost down to a point where it can be an attractive option."

How does that play out? According to Källenius, when you go buy your new S-class, or perhaps your high-end E-Class, you will be able to choose a computer-driver option.

Källenius feels Mercedes-Benz is in a unique position to have success with autonomous cars. "We are working on all three [strategies]. We think that an advantage for Mercedes is that through quick proliferation through our different models, on the Level 2 plus and the Level 3, we very quickly get into the tens of thousands and hundreds of thousands, maybe even millions [of autonomous vehicles]. Whereas many other brands that don't have the position or pricing segment cannot get there as quickly. So we will push both strands at the same time. That is our strategy."