Tomorrow's Economy

Autonomous cars: Could German efforts to race ahead be counterproductive?

29 November 2016

The success of autonomous driving requires international not national solutions

Florian Ranft

Germany is one of the global car manufacturing powerhouses. In the second quarter of 2016 its automotive industry produced more than 3 million passenger cars or 8.6 per cent of global production, making it the third largest producer worldwide. Audi, BMW, Mercedes and others dominate the highly profitable luxury car sector, but have recently come under considerable pressure to develop the technologies of the future: electric power and automated driving systems.

Whereas the transition to electric-powered trains is largely seen as having failed to deliver, transport minister Alexander Dobrindt has seized the opportunity to position the country as the world leader in automated and autonomous vehicles. Although driverless cars will start adding 0.15 per cent to Europe’s annual growth rate in the decades to come, policymakers must get the regulatory picture right. With plans to pass a legislation on the mandatory use of a “black box” in automated cars, Germany prioritises its national interests and risks delaying the swift adaption of autonomous technology across Europe as a whole

The regulation of vehicles is governed by national law but is also heavily affected by European and international law (see Figure 1). On the international level, the 1968 Vienna Convention on Road Traffic, designed to facilitate international road traffic, contains principles defining both the admissibility and liability of new technology. Within the United Nations Economic Council (UNECE) governance structure, namely the World Forum for Harmonization of Vehicle Regulations, the most important motor-vehicle-producing countries regularly come together to harmonise regulations on vehicle technology. Although not binding for non-signatories, such as the United States, UNECE rules have heavily shaped the motor vehicle industry in the past. They set the principle guidelines for what is later translated into EU and national law.

Figure 1:

Source: based on Fraunhofer IAO (2015) Hochautomatisiertes Fahren auf Autobahnen, p 112.

In order to be well prepared for the autonomous future the German government launched an expert roundtable on automatic driving and has drafted a legislative proposal to update national liability rules on highly automated and autonomous driving. Partly based on the discussions of this expert group, in September 2015 the ministry of transport published a white paper called the “Strategy for Automated and Connected Driving”. This paper sets out a distinct German plan of action on autonomous drive, given the importance of automobiles for the economy as a whole. The goal is to make Germany the leading market for, and provider of, automated driving technology.

Among the main regulatory challenges are public safety concerns and liability issues. In its current form German road traffic law reflects the spirit of the manual driving age. It is designed for a world where humans rather than machines or computers assist or fully operate vehicles. At the core of Dobrindt’s traffic code reform, which is currently under ministerial review, stands the delicate and tricky question of who is liable in case of an accident – user or machine/manufacturer. The legislative proposal stipulates that a highly or fully automated driving system can take over while the driver averts their attention to activities other than driving. It also proposes the installation of black box recorders into vehicles to determine whether person or machine was in charge at the moment when an accident happened.

Regardless of the level of automation this will still require a human driver who must be prepared to take over the wheel given an optical and acoustic warning sign by the system. The proposed bill is yet to pass parliament, but as became clear in our interviews, it is likely that the bill will pass the legislative hurdle in both chambers of the federal parliament. Those laws that need to reflect the ethical, moral and consumer protection issues of full autonomy will be subject to the recommendations of an expert commission and dealt with at a later stage, most likely after the general election in autumn 2017.

Legislation to make a data recorder mandatory equipment for German cars could be seen as a blueprint for other countries. However, by rushing ahead with legislation the German government puts national interests first, ignoring debates that have been taken place at UNECE level, or more specifically in WP.29. Leading car manufacturing countries have been discussing data recording technology where Germany favoured an optional rather than mandatory installation in November 2015. Rather than seeking national legislation the German government should make a greater effort to seek international solutions, essentially avoiding regulatory competition and enabling transnational transportation.

Unlike in other areas of rapid tech evolution, like the internet itself, autonomous driving is not a field where the market can gradually evolve and government can play de facto ‘catch-up’. Technology is not ready for commercial use and it remains to be seen which regulations are necessary to make the use of driverless for consumers as safe and efficient as possible. Taking premature legislative measures might delay the swift introduction of autonomous driving in Europe.