Even before the AC1 Sentinel began rolling off the assembly line in August 1942 it had been seen that the 2 pounder was becoming less effective as tank armour increased in thickness on new and improved enemy tanks.
Mounted in a fully traversable turret larger than that of the AC1 but using the same turret ring,[REF] it was slightly cramped for the turret crew but gave the AC3 both armour-piercing capability as well as an effective high explosive round.