The road to autonomous vehicles in Europe

March 2022 | EXPERT BRIEFING | SECTOR ANALYSIS

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Regulations for autonomous vehicles are currently sprouting all over the world, particularly in Europe. And so, the question is what is being pushed faster: the development of technology that can put the vehicles on the road, or the introduction of the regulatory framework for such technology and its safe use on public roads?

The advancement of technology is at the same time fuelled by progressive change in the automotive industry landscape. Legislators have a great responsibility to ensure the safe and sustainable commercialisation of automated and autonomous vehicles. At the same time, this is also a unique opportunity. While they have so far only regulated the vehicle as such, they must now also build a legal framework for the driver in the form of the automated driving system (ADS).

Legal framework for autonomous vehicles

Regulators are very determined to bring autonomous vehicles onto public roads in regular operation in the near future. Things are evolving at all levels, whether it is at the international level, at the European Union (EU) level, or at the local level in certain countries – whether it is road traffic regulations or technical vehicle regulations.

Levels of automation

Ideally, the classification and terminology of the International Organization for Standardization (ISO)/Society of Automotive Engineers (SAE) standard should be followed, which the ISO and SAE provide to describe the six levels of driving automation. The levels span from ‘no driving automation’ (Level 0) to ‘full driving automation’ (Level 5). Autonomous vehicles (AVs) usually refer to ISO/SAE Level 4 or 5, where the ADS performs the entire dynamic driving task and its fallback on a sustained and (for ISO/SAE Level 4 on an operational design domain-specific basis) without any expectation that a user will need to intervene.

International level

The 1949 Geneva Convention on Road Traffic and the 1968 Vienna Convention on Road Traffic, to which France and Germany, for example, are contracting parties, define the international legal road traffic framework. The Vienna Convention still requires the presence of a human driver being able to take over control and thus, still blocks AVs. A recent amendment to the Vienna Convention developed by the United Nations Economic Commission for Europe’s (UNECE’s) Global Forum for Road Traffic Safety, and set to enter into force around March 2022, will address this issue and provide the framework for the responsible use of an ADS. A new Article (34bis) will “deem” the driver requirement “to be satisfied” while the vehicle is using an ADS which complies with domestic technical regulations, and any applicable international legal instrument concerning wheeled vehicles, equipment and parts which can be fitted or be used on wheeled vehicles, as well as domestic legislation on operation.

With regard to international technical vehicle regulations, three new UN Regulations in the field of connected and automated driving have entered into force (in January 2021) and are applicable in the 54 contracting parties to the 1958 Agreement, such as the EU and Germany: UN Regulation No. 155 on Cyber Security and Cyber Security Management Systems, UN Regulation No. 156 on Software Updates and Software Updates Management Systems, and UN Regulation No. 157 on Automated Lane Keeping Systems (ALKS). The German Federal Motor Transport Authority granted Mercedes the world’s first ALKS approval in December 2021.

In the meantime, the UNECE’s World Forum for Harmonization of Vehicle Regulations and its Working Party on Automated/Autonomous and Connected Vehicles (GRVA) are working on harmonising the international technical AV requirements.

EU level

The EU Commission, more specifically the Directorate-General for Internal Market, Industry, Entrepreneurship & SMEs (DG GROW), is also working very actively on creating a legal framework for ADS. In addition, the increasing automation and connectivity of automated vehicles is also addressed in the draft for an EU AI Regulation, to deal with the question of ethics and cyber security.

While the Type-Approval Framework Regulation (EU) 2018/858, which is applicable in all EU member states and stipulates harmonised rules for the approval and market surveillance of motor vehicles and their trailers, as well as systems, components and separate technical units intended for such vehicles, does not yet contain any rules for AVs, this may change as early as July 2022 in the form of an EU ADS Regulation. The latest version of the draft for an EU ADS Regulation came out in December 2021 and aims at setting requirements for the type-approval of “fully automated vehicles” (which appears to refer to ISO/SAE Level 4) with regard to their ADS. At the moment, the ADS Regulation is expected to be limited to small series only and also to certain use cases (e.g., shuttles on dedicated roads). The EU ADS Regulation has yet to be finalised and part of the legislative process is a public consultation.

Overall, the EU ADS Regulation has moved in a positive direction in 2021, although it is still critically discussed by industry participants and associations as well as certain EU member states. Initially, the draft contained some inconsistencies, particularly in terminology and language. For example, the use of the term “vehicle manufacturer” did not make it entirely clear whether, by maintaining the traditional industry roles and responsibility, only traditional original equipment manufacturers were to be seen as suitable applicants for type-approval, or whether the intention was also to open up to new players or all kinds of industry partnerships.

This discrepancy has now been resolved so that the broad and flexible definition of “manufacturer” from the Type-Approval Framework Regulation will apply, which is open to all industry players and all kinds of collaboration among them, as long as the respective ‘manufacturer’ submitting the AV is suitable and willing to take on regulatory responsibility. This will typically be the entity developing the ADS, the centrepiece of the AV.

National level

At a national level, regulators are keeping up with the pace on the international and EU side, or may already be one step ahead. Some of the forerunners in Europe are the UK, France, the Netherlands and Germany.

Germany, for example has passed a new law on autonomous driving, which entered into force on 28 July 2021, and amended the German Road Traffic Act. Statutory provisions in Germany had previously only allowed regular operation by a driver up to ISO/SAE Level 3. The German law on autonomous driving no longer requires a driver and intends to allow “autonomous driving functions” up to ISO/SAE Level 4 to be used in regular operation in defined operating areas. The law will be supplemented by an ordinance which will, among others, provide requirements for the national type-approval of vehicles with autonomous driving functions.

The draft ordinance still contains some inconsistencies – for example it also partly uses the restrictive term ‘vehicle manufacturer’. It cannot be assumed that the German legislator is deliberately restricting itself to traditional industry roles here. After all, Germany has made clear that it wants to be the first country to put AVs on the road on a regular basis. This will only succeed if new and future developments in the industry and technology can be accommodated. The change of government has so far slowed down the final adoption of the draft regulation. Hopefully the legislative process will pick up speed again in the new year.

Key conclusions to build a sustainable legal framework that is fit for the future of AVs

The potential of AV technology in Europe is immense and the legislative developments to enable the regular operation of this technology on public roads are promising. Still, developing an ADS requires extensive technical and specialised expertise, and, in the industry, there are many undertakings to provide for this as new entrants emerge and partnerships of all kinds of industry participants are created.

The need for expertise and technical excellence needs to be sufficiently reflected in the regulatory framework. Only ensuring a safe technology will enable the commercialisation of AV technology and make it a success. For this purpose, the regulatory framework should – as one might think in the first place – not be designed in a narrow or rigid manner. We need a framework that is as flexible as possible to be open for future innovation. At the same time, regulatory responsibility and proof of safety concept should be considered as the decisive factor for regulations and for defining the entity responsible for submitting the AV for type-approval. European regulators have a huge opportunity and can set an example for other countries around the globe – this opportunity needs to be seized.

Dr Patrick Ayad is a partner and Susanne Schuster is a senior associate at Hogan Lovells. Dr Ayad can be contacted on +49 89 290 12 216 or by email: patrick.ayad@hoganlovells.com. Ms Schuster can be contacted on +49 89 290 12 216 or by email: susanne.schuster@hoganlovells.com.

Patrick Ayad and Susanne Schuster

Hogan Lovells