(Bloomberg) --

Mercedes-Benz has been all about showing off what it can do with respect to electric vehicles and software lately.

The German carmaker announced last month that one of its EV prototypes drove more than 1,000 kilometers (621 miles) on a charge, breaking a range barrier that long seemed elusive for a four-seat sedan. After years of criticism for being late to go electric, the manufacturer stepped up its game last year with the launch of its battery-powered flagship, the EQS. Then in December, Mercedes became the first automaker to win approval to deploy a hands-free driving system in Germany, pulling ahead in the race to offer higher levels of automation in one of the world’s most competitive car markets.

The announcements are part of CEO Ola Kallenius’s attempt to seize some technology limelight from Tesla and transform the storied manufacturer into an EV leader.

I caught a glimpse of these efforts last week when Mercedes presented its hands-free driving offering in Berlin. Dubbed Drive Pilot, the system is capable of Level 3 automated driving, a notch higher than Tesla’s Autopilot. Drive Pilot will go on sale next week as an option for S-Class and EQS models at a cost of 5,000 euros ($5,270) and 7,430 euros, respectively.

“This is a big step for us and for automated driving in general,” said Florian Kunkel, a Mercedes development engineer who accompanied me on my test drive through the German capital. “It’s our moon landing.”

Tesla’s Autopilot and $12,000 “Full-Self Driving” features, which consumers are beta-testing in the US and Canada, require drivers to be fully attentive and keep their hands on the wheel and eyes on the road. Mercedes’s Drive Pilot takes over completely in certain scenarios, allowing the person behind the wheel to stop paying attention to the road and instead answer emails, read a book or watch a movie.

“You will get the ultimate gift back, which is time,” Kallenius said Monday during the Financial Times Future of the Car summit.

Before we took off in a black S-Class, Kunkel walked around the car to show me the cameras as well as the radar, lidar, ultrasound and moisture sensors that allow the machine to take over. Vehicles equipped with Drive Pilot have built-in redundancies to ensure components ranging from the sensors and battery to the steering motor keep working safely.

Still, the system has its limitations. It’s only approved for stretches of Germany’s Autobahn highway network at a speed of up to 60 kilometers (37 miles) per hour, meaning it’s largely limited to handling slow-moving traffic jams. Lane changes aren’t allowed and the software usually doesn’t work in tunnels. Drivers must remain awake and able to retake the wheel if the system alerts them to do so, and Mercedes doesn’t recommend holding devices like a tablet or laptop between your body and the airbags.

Soon after we reached Berlin’s busy city Autobahn, we ran into heavy traffic, so I pushed a button on the inside of the steering wheel to hand over driving to the software. I was surprised how smooth it handled braking and accelerating. After a minute of talking to Kunkel next to me, I stopped paying attention to the traffic — and it didn’t feel awkward at all. When we approached a stretch of highway with a lot of tunnels, the software pinged me to take over.

Mercedes is working on getting Drive Pilot approved elsewhere in Europe and the US. Company officials expect regulators to eventually allow the system to operate at faster speeds and on roads beyond just the Autobahn.

“We’ve only taken the first baby steps,” Kallenius said. “I think this will be one of the most exciting developments in the auto industry in this decade.”

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