Current world models operate at a single level of abstraction, with most prioritizing perceptual fidelity while lacking the spatial reasoning and semantic understanding required for real-world downstream tasks. We present a hierarchical driving world model that factorizes future prediction across two levels operating at distinct temporal and abstraction scales: a high-level predictor that forecasts coarse scene structure over extended temporal horizons, and a low-level generator that produces detailed predictions conditioned on the high-level output. This decomposition yields high perceptual fidelity while also capturing strong spatial and semantic representations. We further show that pretraining with a diffusion forcing objective yields substantially richer internal representations than the standard teacher forcing objective, while teacher forcing -- predicting only the next frame from clean context -- produces more stable autoregressive rollouts. We therefore introduce a generic two-stage training paradigm that pretrains the model with diffusion forcing and fine-tunes with teacher forcing, combining the representational benefits of the former with the rollout stability of the latter. Our approach achieves state-of-the-art results across the standard suite of driving world model evaluations on established benchmarks, including long-horizon generation fidelity, steering responsiveness evaluated on counterfactual scenarios, and internal representation quality. Project page with code, demo, checkpoints and qualitative results: https://lmb-freiburg.github.io/orbis2.github.io/

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