What Are The Regulatory Barriers To Full Self-Driving?

Elon Musk says Tesla needs regulator approval to release the "Full Self-Driving" functionality to the public, but does he? It's complicated.

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While the rest of the autonomous drive technology sector dials back its ambitious deployment plans, Tesla is still charging ahead. During Tesla's "Autonomy Day" presentation CEO Elon Musk said the company's controversial Full Self-Driving option will be "feature complete" by the end of this year, and that "by the middle of next year, we’ll have over a million Tesla cars on the road with full self-driving hardware, feature complete, at a reliability level that we would consider that no one needs to pay attention." 

Assuming Musk's predictions are accurate, only one thing seems to stand in the way of this monumental achievement: the need for "regulatory approval." Musk has repeatedly referenced this potential barrier in public comments about Full Self-Driving, mystifying many in the space who are all-too aware of the fact that there is no reference to autonomous vehicle software in the Federal Motor Vehicle Safety Standards (FMVSS), with which companies must comply to receive approval to sell a vehicle in the United States. Since Musk has never clarified what he means when he says "regulatory approval," and since Tesla has not responded to The Drive's request for clarification, let's examine the situation as it stands right now.

Though cars are subject to any number of rules established at national, state/province, county and municipal government, "regulatory approval" has a very specific meaning in the auto industry. In order to sell a new vehicle in a given country a national regulator must approve it for sale by ensuring that it complies with the country's rules, which generally focus on safety and emissions. Since autonomous drive technology doesn't effect emissions, "regulatory approval" in the context of the United States (where Tesla sells the vast majority of its vehicles) means demonstrating compliance with the safety requirements of FMVSS

The Department of Transportation, which issues and enforces FMVSS, has promulgated three sets of guidelines for autonomous vehicles, which are non-prescriptive and entirely voluntary. Transportation Secretary Elaine Chao has repeatedly emphasized that she does not want federal rules to "stand in the way of innovation," citing the number of road deaths caused by human error as the reason to avoid any kind of barrier to autonomous vehicle deployment. In fact, one of the Department of Transportation's main priorities for autonomous vehicle policy has been to streamline the process for approving FMVSS exemptions for autonomous vehicles.

If you're thinking "see, there are regulations that affect AVs after all," hold your horses. Those exemptions are for autonomous vehicle designs that deviate from FMVSS rules about things like vehicle control systems, such as GM's plan to build an autonomous Chevrolet Bolt without a steering wheel. FMVSS doesn't say anything about autonomous vehicle software, so as long as Tesla (or any automaker) plans to upgrade its FMVSS-compliant vehicles with software alone, or even hardware like processors that aren't regulated by FMVSS, that update wouldn't require any form of regulatory approval. The same goes for any automaker: if a car has been approved for sale in the United States, it can be upgraded to be capable of autonomous driving as long as that upgrade doesn't alter anything specifically listed in the FMVSS, none of which are directly related autonomous drive technology. 

In theory, at least, all this could change at any time. That said, regulators from both the Trump administration and the Obama administration have explicitly expressed the desire to avoid putting up any barriers to innovation in autonomous drive technology. Nor has there been a serious legislative effort to create a regulatory approval process for autonomous vehicles. In fact, the piece of AV legislation that came the closest to passage (last year's AV START Act) actually sought to provide even more exemptions for the human-centric FMVSS rules referenced earlier, actually lowering the barriers to autonomous without traditional human controls. Opposition to such deregulation has been relegated to relatively marginal interest groups like the League of American Bicyclists and representatives of states who have developed their own rules about autonomous vehicles, who were worried by language in the bill that could have enshrined the Department of Transportation as the only body capable of setting standards for AV construction and performance (known as federal pre-emption).

This, of course, brings us to a far more complex issue that Tesla's defenders regularly bring up as an explanation for Musk's comments about "regulatory approval": state laws about autonomous vehicles. 29 states have passed legislation concerning autonomous vehicles according to the National Conference of State Legislators, and 11 more states have enacted executive orders affecting self-driving vehicles. Some of these rules, like legislation passed in Florida and an executive order in Arizona, explicitly allow driverless vehicles on the state's roads. Others, like executive orders in Washington, Ohio, and numerous other states simply order the creation of committees or working groups to study the issue. Some states have passed rules permitting autonomous vehicles provided they meet existing FMVSS and DMV standards or carry specific amounts of insurance, but only a few have rules that impose a meaningful compliance burden on the developers or operators of autonomous vehicles that meet state and federal non-autonomous vehicle rules.

Going into the entire body of state-level legislation affecting autonomous vehicles would turn this into something more than an overview of barriers specific to the deployment of Full Self-Driving, so instead let's focus on the most comprehensive and potentially burdensome set of rules facing Tesla's autonomous plans: California. The home of much early autonomous vehicle development, California's DMV has set the most thorough and far-reaching rules regarding AVs anywhere in the US... inconveniently enough, in the state that has always been Tesla's single largest market. The DMV has set rules requiring permits for autonomous vehicle testing with a human "safety driver," without a human "safety driver," as well as for "public deployments," while the California Public Utilities Commission has an autonomous vehicle pilot permit program under its authority to regulate ride-hailing operations in the state. 

Tesla already has a DMV permit to test autonomous vehicles in California, so to make Full Self-Driving available to its customers there it only needs a DMV public deployment permit (Tesla only needs CPUC approval to create a ride-hailing network, not to deliver autonomous functionality that its customers have paid for). This would require Tesla to submit an application outlining the operational domain for Full Self-Driving (presumably everywhere), have the ability to log data and make updates (which Teslas already have), and "certify" that it is satisfied that its vehicles are safe for use on California's roads and meet industry cybersecurity standards. More significantly, Tesla would also have to take legal liability for any property damage, injuries or death caused by its self-driving cars, and provide some form of insurance or self-insurance against that liability. But as long as its vehicles meet FMVSS (which they already do), it submits testing information, provides an educational program to consumers, can communicate owner information to law enforcement and has a "communication link" to a remote operator, "if any."

In short, as intimidating as California's rules might seem they essentially boil down to the same principles of self-certification that essentially every form of automotive regulation in the US relies on. In response to questions about how Tesla might approach the public deployment permit process, DMV Public Information Officer Marty Greenstein tells The Drive that Tesla has extensive discretion to even define its vehicles as "autonomous":

"At the federal level, the U.S. relies on a manufacturer’s “self-certification” on the functionality and performance of their vehicles. Likewise, the California DMV’s autonomous vehicle regulations also require the manufacturer to self-certify their level of autonomy. We rely on the manufacturer’s certification of its capabilities, the literature there may be on the capabilities of the vehicles, and, if necessary, a meeting with the company to address any questions we have about the capabilities of the system. The determination on whether the department is convinced that it is a “driver assistance” system will rest on whether the department believes that the vehicle does not meet that definition of an autonomous vehicle in the department’s regulations and in California Vehicle Code section 38750." [Ed: link added]

In other words, Tesla might even theoretically be able to activate "Full Self-Driving" features but require active driver supervision in order to continue defining the system as "driver assistance" for regulatory purposes. However, Greenstein warns, the DMV is not inexperienced with such subterfuge:

In December 2015, Uber did exactly that – it rolled out a fleet of AV equipped vehicles in San Francisco and claimed that they were not autonomous vehicles. Based on the report that we were receiving about the vehicles and our own experience with the autonomous technology being tested by other manufacturers at the time, we believed the vehicles were operating without the proper AV testing permit. We canceled the titles to the vehicles because they were not titled appropriately as AV test vehicles, which meant that they could not be driven on California roads. As a result, Uber moved the vehicles out of state. Granted, it is a different situation when dealing with manufacturer-owned test vehicles rather privately owned vehicles, and the DMV would take that into consideration if we were forced to take action. 

Moreover, Greenstein adds, the 2018 enactment of AB 87 empowers local law enforcement authorities to impound any vehicle "operating using autonomous technology, without the registered owner or manufacturer of the vehicle having first applied for, and obtained, a valid permit that is required to operate the vehicle on public roads." This recently-enacted enforcement tool probably makes it likely that Tesla will seek a permit before activating Full Self-Driving for California customers, but it's worth noting that the consequences of an unpermitted deployment of autonomous drive capability would be born not by Tesla itself but by the customers whose cars would be impounded. Though Tesla might well choose not to run the risk of its customers' vehicles being impounded en masse across its largest (and home) market, it appears that even California's sweeping rules can't prevent it from activating Full-Self Driving or even directly punish it for doing so except by punishing its customers and hoping they in turn exert pressure on Tesla through a civil suit or some other action.  

Though this distinction may seem academic, it's not meaningless. Localities may regulate the use of autonomous vehicles on roads in their jurisdictions, but they are limited in their ability to directly regulate the sale or availability of autonomous drive capabilities and if revived efforts to pass the AV START Act are successful, we could even see its federal preemption rules used to challenge the most prescriptive aspects of state rules regarding performance and construction in court. Even in the absence of federal preemption rules, California's rules hardly present a specifically insurmountable challenge to Tesla's Full Self-Driving plans and largely consist of self-certification.

Finally, even if a state (or city or county) did specifically and unequivocally ban Tesla's planned Full-Self Driving capabilities, there's no reason why Tesla couldn't simply prevent the activation of those features within that specific region. Geofencing is trivially easy on a technical level, and there's no good reason that a single locality's rules should prevent thousands of Tesla customers in other areas from receiving the feature they paid thousands of dollars for. The logic of a local law preventing the deployment of Full Self-Driving quickly collapses into absurdity, when you consider the possibility that the tiniest town might simply ban autonomous vehicles from its jurisdiction outright for no good reason beyond ignorance and fear. If Tesla proposes to hold onto millions of dollars that its customers have paid for Full Self-Driving until no barrier to use of autonomous vehicles exists anywhere in the world, Teslas will likely never drive themselves.

Of course, absent any kind of specifics from the company itself about the regulatory obstacles its CEO repeatedly refers to, one can only wonder why this subject receives so much emphasis. Given the technical challenges of delivering a safe, reliable Level 5 autonomous drive system, especially using the extremely limited sensor suite on current Teslas (relative to the vast majority of other autonomous vehicle strategies), regulatory compliance seems like the most trivial hurdle facing Tesla's Full Self-Driving plans. Then again, with the entire fate of the company seemingly hanging on Tesla's ability to deliver Full Self-Driving, having someone else to blame if timelines continue to slip will certainly be convenient. If only regulators could somehow do more to get out of the way of autonomous drive innovation.