The question is two fold. Can the customer accept the release into use and the other does the customer have the ability to make use of the incremental capabilities of these releases?
Let's start with the incremental release. I know the picture to the left is considered a metaphor by some. But as a metaphor it's a weak. Let's look a a few previous posts. Another Bad Agile Analogy, Use, Misuse, and Danger of Metaphor. Each of these presents some issues with using Metaphors.
But let's be crystal clear here. Incremental development in the style of the bottom picture may be a preferred method, once the customer agrees. Much of the reterotic around agile assumes the customer can behave in this way, without looking outside the ancedotal and many times narrow experiences of the those making that suggestion. For agile to succeed in the enterprise and mission critical product and project domain, testing the applicability of both pictures is needed.
Ask the customer if they are willing to use the skateboard while waiting for the car? Otherwise you have a solution looking for a problem to solve.
Now to the bigger issue. In the picture above, the top series is a linear development and the bottom an iterative or incremental depending on where you work. Iterating on the needed capabilities to arrive at the car. Or incrementally delivering a mode of transporatation.
The bottom's increment shows 5 vehicles produced by the project. The core question that is unanswered is does the customer want a skate board, scooter, bicycle, motorcycle, and then a car for transportation. If yes, no problem. But if the customer actually needs a car to conduct business, drive the kids to school, or arrive at the airport for your vacation trip.
The failure of the metaphor and most metaphors is they don't address the reason for writing software for money
Provide capabilities for the business to accomplish something - Capabilities Based Planning
The customer didn't buy requirements, software, hardware, stories, features, or even the agile development process. They bought a capability to do something. Here's how to start that process.
Here's the outcome and an insurnace provider network enrollemtn ERP system.
Producing skateboards, then scooters, then bicycles and then finally the car isn't going to meet the needs of the customer if they want a car or a fleet of cars. In the figure above the Minimal Viable Features, aren't features they are capabilities. For example this statement is a minimal viable product is likey a good description of a Beta Feature. Could be connected to a business capability, but without a Capabilities Based Plan as in above, can't really tell.
So How Did We Get In This Situation?
Here's a biased opinion informed by my several decades of experience writing code and managing others who write code - we're missing the systems engineering paradigm in commercial software development. That is for software development of mission critical systems, and Enterprise IT is an example of mission critical systems.
Here's some posts:
The patradigm of Systems Engineering fills 1,000's pages and dozen's of books, but it is boiled down to this.
You need to know what DONE looks like in units of measure meaningful to the decision makers. Those units start with Measures of Effectiveness and Measures of Performance.
Each of those measures is probabilistic, driven by the underlying statistical processes of the system. These mean you must be able to estimate not only cost and schedule, but how that cost and schedule will deliver the needed system capabilities measured in MOE's and MOP's.