Level 0: This level is where we mostly are. The human driver controls everything: steering, brakes, throttle, power.
Level 1: This level means that most functions are still controlled by the driver, but a specific function, like steering or accelerating can be done automatically by the car.
Level 2: At least one driver assistance system of "both steering and acceleration/deceleration using information about the driving environment" is automated, like cruise control and lane-centering. It means that the "driver is disengaged from physically operating the vehicle by having his or her hands off the steering wheel and foot off pedal at the same time." The driver must still always be ready to take control of the vehicle.
Level 3: Drivers are able to completely shift safety-critical functions to the vehicle, under certain traffic or environmental conditions. It means the driver is still present and will intervene if necessary, but is not required to monitor the situation in the same way it does for the previous levels.
Level 4: Level 4 vehicles are "designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip." However, it is important to note that this is limited to the "operational design domain" of the vehicle, meaning it does not cover every driving scenario.
Level 5: This level refers to a fully-autonomous system that expects the vehicle's performance to equal that of a human driver, in every driving scenario, including extreme environments. It can operate without a driver or passengers.
It is important to distinguish between "autonomous" and "driverless." Driverless is a more advanced stage of autonomous.
Other considerations - car insurance business will be affected, since the number of accidents is predicted to go down 80% by 2040. The different levels are important, because they change the risk profile of the car. Other costs are more likely to go up as new technology is added to the cars.
Interesting to know the things auto manufacturers are dealing with, such as avoidance of large animals requires recognition and tracking. Volvo found that software suited to caribou, deer, and elk was ineffective with kangaroos.