Do you have a release cue, something that tells him he can stop doing whatever you've asked him to do? I use "okay", and there are all sorts of reasons why that's not the best word to use, but old habits die hard.
If you haven't trained anything for that yet, pick a word or phrase - some people use "free" or "release", or "take a break". Others use their marker (a click, or a verbal marker such as "yes!") to indicate that the exercise is over and the dog can now move.
For the going into a down after you've told him to sit, I'd give him a couple of treats in rapid succession while he's in position, and then release him from the sit before he has a chance to lay down. Pick another word (such as "good"), to signal that he's doing what you want when he sits on cue, but that he needs to keep doing it. If you miss and he lays down before you can stop him, you can use a negative marker, aka a "no reward marker" - NRM), such as "oops!", and then re-cue the sit. Not everyone uses a NRM, but I think it's good to give the puppy as much information as possible. Start with very short duration before extending the amount of time you expect him to remain in position, so he has the most opportunity to succeed. Once he'll hold a sit for a few seconds without breaking, start to mix up the amount of time so he doesn't start anticipating the release - this time it might be one second, next time 4 seconds, then 2 seconds, etc.
Also, if he's only sitting when he wants to and not when you cue it, he probably doesn't fully understand the cue. To us, sit means to plant his butt on the floor/ground, but dogs are more literal and don't generalize well. So if you mostly train in one place, at the same time of day, and with him facing you toe to toe while you're standing in front of him, he'll learn that's what sit means. Train in different rooms every day, train him while you're standing, while you're sitting in a chair or the couch, or on the floor with him. Train him to sit next to you in addition to in front of you. Train him in your yard, then on the sidewalk in front of your house, until no matter where you are or what you're doing, he'll consistently respond to the cue.
Distance commands are more challenging, so I would wait to work on that until he's solid sitting in front of you or at your side in a variety of different circumstances. Automatic sits are fine, I wouldn't worry about that too much. I actually like an automatic sit at my side when I stop walking, and train my dogs to do that by luring at first, then simply waiting for it, then marking and rewarding.