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Why Cities: Skylines 2 performs poorly
(blog.paavo.me)
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Yeah it's a super hard problem, but my point is that in the specific case of a city building game most of the models are going to be extremely small on the screen 90% of the time, so you can get away with pretty terrible automated LOD in a way you can't in most other genres; you just don't swap to low-poly versions until stuff is extremely far away.
I was actually just thinking they should do this as an interim solution and then make optimized LODs to replace the automatic ones with. In fact, perhaps that would have been the thing to do instead of making advance apologies. Slightly suboptimal image quality at release would probably have been more tolerable than heinously bad performance.