Article is misleading. Tesla sent a letter to the CA DMV requesting approval for a feature which they referred to as "City Streets" which they say is level 2, and will continue to be level 2 as it is developed. They specifically say in this very document that they will develop higher levels of autonomy in the future, so it's pretty clear that the "final release of City Streets will continue to be level 2" quote is just referring to the particular subset of functionality that they're seeking approval for.
From the very same letter, there is also this quote:
Please note that Tesla’s development of true autonomous features (SAE Levels 3+) will follow our iterative process (development, validation, early release, etc.) and any such features will not be released to the general public until we have fully validated them and received any required regulatory permits or approvals.
From the very same letter, there is also this quote:
Please note that Tesla’s development of true autonomous features (SAE Levels 3+) will follow our iterative process (development, validation, early release, etc.) and any such features will not be released to the general public until we have fully validated them and received any required regulatory permits or approvals.