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Top-5 new changes in 2021 transforming Autonomous Driving

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 2nd the “UN Regulation on Software Updates & Software Updates Management Systems”.

To better understand the changing legislation read our reports:

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.

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