2020 saw the launch of Level 4-Autonomous Driving in Automated Mobility on Demand (AMoD) from Waymo. But in passenger cars, the level of automation is still Level 2-Partial Automation.

Here are the biggest changes in Autonomous driving in 2021:

1. New Autonomous Driving Regulation for Level 3 is coming in 2021
2. Cyber Security mandates coming from January 2021
3. Autonomous driving poses challenges to Auto Insurance
4. The role of ADAS Suppliers in new Mobility will rise
5. HMI becomes the king of the vehicle interior

1. Regulation will finally allow Level 3 autonomous driving from 2021

In Europe, Japan, and China, Type approval of SAE Level 3 autonomous driving features, such as Audi’s AI Traffic Jam Pilot, is not allowed today requiring the amendment of UN Reg. No.79. The delay of the amendment of R79 is blocking Audi’s Lv.3 deployment strategy since 2018 until the UNECE-Automated Lane Keeping Systems regulation comes to force in Jan’21.

Read more about the requirements of the regulation here.

We see Europe and Japan benefiting from the changes in regulation due to the combination of technological capabilities in Level 3 from their domestic carmakers and the favorable political framework to remove roadblocks and establish their respective markets as key innovation hubs.

Germany and Japan to become early adopters

Europe is the leading geography in terms of penetration of ADAS technology, thanks to innovation primarily from German carmakers. Level 2-Driving feature availability in Europe reached 91 models in 2019 as Volume brands such as Renault, Citroen and Honda introduced Traffic Jam Assist features. Mercedes-Benz has already stated that its new S-Class equipped with the new DRIVE PILOT will switch on Level 3 by late ’21 on suitable highways in Germany. We expect Audi, and BMW to join Mercedes-Benz among the first carmakers to activate Level 3 via Over-the-Air-Updates in Europe.

Before the pandemic hit, Japan aimed to align its Autonomous Driving regulatory framework with Europe aiming to unlock Lv.3 for the 2020 Tokyo Olympics. In Jan’20, Japan even announced safety standards for Lv3. We expect that Level 3 demonstrations in Japan during the 2021 Tokyo Olympics will demonstrate its technological innovation led by Nissan who will offer its first Level 3 Pro-Pilot feature in the Skyline.

To learn more about competition and market developments in the next decade read our report 30 Carmakers’ Roadmaps in Automated Driving up to 2025.

2. Auto Insurance is up for disruption

Who is liable for a crash when Level 3 is in “Active mode”?

Level 3-Autonomous Driving presents a challenge to traditional vehicle insurance due to its implications for the determination of liability. In Level 3, the transfer of vehicle control from the driver to the Automated Driving System has implications for the determination of liability since the driver is still the ultimate back-up. This also creates insurance challenges for higher levels of automation.

More specifically, since the Liability framework for Level 3 is still largely unconfirmed, insurance tools are not in place for this level of automation. The above challenge the development of Level 2-Autonomous Driving and Level 3 features by manufacturers. However, carmakers, including Audi and Volvo have claimed that they will be accountable for potential failures when their ADS are active.

The ALKS regulation mandates vehicles to be equipped with a Data Storage System for Automated Driving — the so-called “black box” — which will record when ALKS is activated. Car manufacturers must also introduce Driver Availability Recognition Systems, which monitor seatbelt use and monitor the driver’s capability to take back control of the vehicle, including through spotting eye blinking and closure.

Among automotive industry associations, the GEAR 2030 has expressed the views that “motor insurance and product liability directives are sufficient for upcoming systems, whereas harmonisation of national liability regimes is neither needed nor feasible for the upcoming systems in 2020”.

We see the need for adequate education of drivers, from both carmakers as well as rating associations such as the NCAP to help them understand their legal requirements and avoid consumer confusion over driver responsibilities or even misuse resulting from “mode confusion”.

3. Automotive Cyber Security becoming mandatory

Over the next decade, as transportation progresses from Connected and Partially-Automated to Highly and Fully-automated, Smart and Shared Mobility, the addition of new sensors and ECUs, new architecture, more Connected devices and V2X will significantly enlarge the vehicle ‘’attack surface”. Identifying, mitigating and responding to cyber threats will not only be paramount for physical road and vehicle safety but also a prerequisite for the transition towards self-driving cars.

ALKS will also need to comply with cyber-security and software update requirements set out in two other new U.N. regulations. In more detail, two new regulations on automotive cybersecurity and software updates to establish clear performance and audit requirements for OEMs are coming into effect in Jan’21.

• The 1st is the “UN Regulation on Cybersecurity and Cyber Security Management Systems” and
• the 2^nd the “UN Regulation on Software Updates & Software Updates Management Systems”.

To better understand the changing legislation read our reports:

• Automotive Cyber Security 2025: the secure Connected Car
• Regulatory roadmaps to Autonomous Driving, Automotive Cyber Security, V2X & AI

4. ADAS Suppliers poised for growth but they will face even tougher competition

ADAS suppliers are well-positioned to monetize the revenue growth coming from the proliferation of ADAS. They have significant expertise in the design, development, and delivery of components for ADAS and/or ADAS features, which gives them an edge over many OEMs.

Leading ADAS suppliers are in a unique position to supply multiple OEMs with technology which provides them a wide customer base but they also have the ability to sell their ADAS portfolio directly. Furthermore, leading Tier-1s have announced a continuing investment in human capital and expansion of production capacity, especially for radars and Lidar sensors. Last but not least, leading ADAS suppliers to have a well-diversified revenue base and additionally worldwide presence to capitalize on growth in different regions, i.e. currently in advanced car markets which account for most of ADAS revenues but later on in emerging car markets so the highest growth potential. 

Fighting off new entrants: new expertise & collaborative business models needed

As mobility shifts from product to service, the world’s biggest automotive suppliers are striving to develop capabilities in AI & software. Bosch is committed to invest 300 million euros by 2021 in the development of the Bosch Center of Artificial Intelligence which already operates in India, the U.S. and Germany. But even though they invest heavily to support the autonomous driving and connectivity roadmaps of carmakers, tech giants entering the mobility space seem to be closer to bring new services to the market.

To learn more about winning business models in ADAS & Autonomous Driving and market leadership in ADAS read our report Rankings & market shares of Top Tier-1 ADAS Suppliers by 2020.

5. New HMI technology will see growth to unlock driver safety and convenience

Today, drivers cannot be distracted by ADAS. They always have to have their hands on the steering wheel and their eyes on the road. But a number of reasons cause confusion to drivers leading to system misuse or abuse. Carmakers face challenges with ADAS Level 1-2 UX / UI which might confuse drivers and lead to system misuse of abuse.

Intuitive interaction with HMI and safe transition of control between the driver and the system is critical for higher levels of automated driving. Already, the UNECE-R79 regulation is considering mandating technologies such as driver-facing cameras to mitigate safety risks of ‘’transition demand’’. In addition to regulatory requirements, engineering requirements for functional safety will affect the design and operation of modern HMI for automated driving to deliver enhanced safety and take advantage of the side tasks unlocked by higher autonomy.

We see 3 key changes coming up in 2021 around HMI for ADAS and Automated Driving

1. Further industry standardization of ADAS HMI visuals on driver cluster (status, warnings) driven by the regulatory guidance;
2. Driver-facing cameras need to become an engineering requirement for Lv.2 systems to prevent driver distraction in L0-1 and help with driver availability in L2 and L3 handover;
3. AI-based emotion state monitoring to tackle inefficiencies of current Driver monitoring systems and shift from mitigation to prognosis.

For more information, please contact us on (+44) (0)20 3286 4562 or info@auto2xtech.com

• After almost 3 years in the making, the amendment of UNECE Reg. No.79-Steering Equipment will allow Level 3 in countries adopting the new rules called “Automated Lane Keeping System”
• Germany, France, and Japan expected to be among the first. But the USA does not follow the same regulatory framework
• Mercedes-Benz, BMW, Nissan, and Honda are among the carmakers announcing a shift to Level 3 from 2021 – Audi, Tesla expected to join
• Regardless, ADAS Lv.0-2 will be the most prevalent by 2025

Today regulation restricts Level 3 in UN R.79 counterparties incl. the EU, Japan and China

Regulation delayed the transition to “conditional eyes-off” from 2017 to 2021-22 in signatories of UNECE N.79 giving an advantage to the USA, which follows voluntary guidelines instead of mandates for type approval. However, Audi lost its head-start to deploy Lv.3 in the US whereas Tesla’s FSD is still a hands-on Level 2 system.

Going beyond today’s status of Automated Driving, which is SAE Lv.0-2 with the latter meaning the drivers must always be in control even if ADAS are active, would require a new approach to the road traffic-otherwise drivers would be breaching their legal obligations. Regulators and technical groups have been trying to amend the R.79-Steering Equipment to allow the system to control the vehicle during “automated mode” with the driver as a fall-back.

The introduction of L3 driving features will allow the driver to take his/her eyes-off the road during the automated driving mode since the ADS will be responsible for monitoring the road when it’s in active mode. This presents engineering challenges to the automotive industry in terms of robustness, validation as well as technical and ethical issues.

What is more, the introduction of these systems falls under regulatory approval both at an international level (e.g. R79) and at a national level (domestic traffic laws). Work is being done on both aspects of major car markets.  

UNECE’s Automated Lane Keeping System regulation is applicable for LEVEL 3, for low-speed (60 km/h) highway-only

In Jun’20, the UN announced the ALKS regulation which is set to apply to 60 countries including the UK, Japan, and European Union member states from January 2021, to enable the safe introduction of ‘Level 3’ automation features in certain traffic environments. 

UN regulations manage pre-sale Type Approval, i.e. the Regulation sets out clear performance-based requirements that must be met by car manufacturers before ALKS-equipped vehicles can be sold within countries mandating the Regulation.

Table Requirements of Automated Lane Keeping Regulation (Text here)

“Automated Lane Keeping System (ALKS)” for low speed application is a
system which is activated by the driver and which keeps the vehicle within its lane for travelling speed of 60 km/h or less by controlling the lateral and
longitudinal movements of the vehicle for extended periods without the need for further driver input.

ALKS

Requirements

1. “ALKS can control the vehicle when the driver is behind the wheel with their seatbelt on.” This means that the regulation does not allow driver-less vehicles, as in the case of Waymo. It’s important to note that Mobility services are expected to follow different rules compared to passenger cars. 2. The driver can override such systems and can be requested by the system to intervene, at any moment. Operational domain 3. ALKS can only be activated on roads equipped with a physical separation dividing traffic moving in opposite directions, and where pedestrians and cyclists are prohibited. 4. In its current form, the Regulation limits the operational speed of ALKS systems to a max of 60 km/h (37 mph) 5. Screens for any activities other than driving are automatically switched off as soon as the driver resumes control 6. The Regulation also lays down requirements on how the driving task shall be safely handed back from the ALKS to the driver, including the capability for the vehicle to come to a stop in case the driver does not reply appropriately. 7. The regulations also require vehicles to be equipped with a Data Storage System for Automated Driving — the so-called “black box” — which will record when ALKS is activated. 8. Car manufacturers must also introduce Driver Availability Recognition Systems, which monitor seatbelt use and monitor the driver’s capability to take back control of the vehicle, including through spotting eye blinking and closure. 9. ALKS will also need to comply with cyber-security and software update requirements set out in two other new U.N. regulations also adopted this week.

Adoption by counterparties & carmakers

The government of Japan – which co-led the drafting of the Regulation with Germany – will apply the Regulation upon entry into force. The European Commission, which also contributed to its development alongside, amongst others, France, the Netherlands and Canada, has announced that the Regulation will apply in the European Union following its entry into force. UN mentioned that a number of major automotive manufacturers are expected to apply the Regulation upon entry into force.

What is the outlook for regulatory roadmaps of carmakers for Level 3-4 Automated Driving?

We expect Germany to lead Lv.3 deployment in Europe after the amendment of R79, followed by the UK. German brands, such as Audi, BMW, and Mercedes, did not manage to take advantage of exemptions using Article 20 and Germany’s early move of road traffic act amendments. But standardization across Europe will probably start after 2022 – which is a considerable delay for brands such as Audi whose Lv.3 system was scheduled for deployment in Europe in 2018 and it is still not available in the USA, Europe or China.

Audi become the first to introduce a L3-Driving feature in 2017 with the AI Traffic-Jam Pilot in the 2018MY A8. However, Audi has still not deployed the feature because they have not been granted regulatory approval and validation is pending. Audi’s flagship, which became available in Germany by the end of 2017, is equipped with long-range radars, 12 ultrasonic sensors, Lidar and hi-resolution video cameras which will constantly monitor the car’s surroundings allowing TJP to guide a car through traffic-jams at speeds up to 37mph (60 km/h).  

When Audi’s AI Traffic Jam Pilot is active, drivers will be able to take their eyes-off the road and perform side tasks, e.g. read emails. But they must always be available to takeover vehicle control- since they are (by definition) the ultimate back-up. Audi has stated that they will accept full liability while in L3 autonomous mode. Volvo has done the same.

We expect that Lv.3 cars will feature AD-Event Data Recorder (AD-EDR) to handle liability issues. Audi’s strategy to deliver Lv.3 marks an intermediate level of autonomy between Supervised driving (SAE Level 0-2) and Unsupervised driving (Level 4-5) which could be described as Conditionally-Unsupervised.

Learn more about Regulation & Carmakers’ roadmap’s in Auto2x’s reports

• To understand the current status of autonomous vehicle deployment including the ADAS&Autonomous Driving portfolio of 30 leading brands, read our report: 30 Carmakers’ roadmaps in Automated Driving by 2025
• To read more about the current state of the art of regulation read our report Regulatory guide to Autonomous Driving, Automotive Cyber Security, V2X & AI. This report analyses the regulatory landscape for the transition from Supervised to Unsupervised-Driving (SAE Level 4-5) to allow the deployment of higher levels of autonomy. Since the future is also Secure and Connected, our analysis also provides a regulatory guide on Automotive Cyber Security and V2X (V2V-V2I).

Read more insights

• Top-5 new changes in 2021 transforming Autonomous Driving
• Regulatory impact on the deployment of Highly-automated driving
• Germany legalizes Level 3 automated driving technology that allows “eyes-off” the road
• Volvo to skip Level 3 autonomous mode

For more information on this report, including sample pages and a full Table of Contents, please contact us on (+44) (0)20 3286 4562.