How Vehicle Manufacturers and their Suppliers Should Prepare to Comply with European Autonomous and Automated Vehicle Legislation – An 8-point guide

The European Union (“EU”) and member states are actively developing regulations for autonomous and automated vehicles (“AVs”) to ensure they are safe, reliable, and ethically designed. For AV manufacturers and their suppliers, compliance with these regulations is crucial to accessing the European market and building consumer trust. 

AV manufacturers and their suppliers should prepare in the following ways: 

1. Understand the Regulatory Landscape

• Monitor EU Regulations: including Regulation (EU) 2019/2144 ("General Safety Regulation") which mandates advanced vehicle systems (including driver drowsiness and attention warning, intelligent speed assistance, and alcohol interlock installation facilitation) and introduces specific requirements relating to AVs; and the new EU Product Liability Directive which has significant implications in terms of liability for, inter alia, software products, software updates and AI-driven products.
• Monitor UNECE’s automated driving rules: including UN-ECE R 155 requiring a certified Cyber Security & Cyber Security Management System (“CSMS”)  to obtain type-approval of a new vehicle type; UN-ECE R 156 requiring a certified Software Update & Software Update Management System (“SUMS”) to obtain type-approval of a new vehicle type; UN-ECE R 157 establishing requirements for type-approval of a new vehicle type with regard to Automated Lane Keeping System (“ALKS”); and UN-ECE R 171 on uniform provisions concerning the approval of vehicles with regard to Driver Control Assistance Systems (“DCAS”). These UNECE regulations are binding on EU member states ensuring that AVs meet strict criteria before being introduced to the EU market.
• Track and adapt vehicles to national level legislation: Some EU member states have specific local laws for AVs. For example, the German Act on Autonomous Driving establishes the regulatory framework for AVs (level 4) to be allowed to operate in determined operational areas across Germany. The UK (although not part of the EU) has introduced the Automated Vehicles Act 2024 which with regards to self-driving vehicles aims to create a rigorous safety framework, clarify legal liability, and protect consumers. Further guidance is available here. 
• Prepare for Type Approval: AVs must meet the EU’s type approval standards before being sold or used on roads, ensuring they comply with safety, emissions, and performance regulations. Further guidance is available here. 

2. Implement Safety and Cybersecurity Measures

• Comply with ISO 26262: This standard ensures AVs’ functional safety by minimizing risks due to system failures.
• Adopt Cybersecurity Standards: Comply with UN-ECE R 155, which focuses on vehicle cybersecurity management systems, preventing hacking and data breaches in AV systems.
• Safety of the Intended Functionality (“SOTIF”) (ISO 21448) Compliance: Ensure the AV’s safety, even in unpredictable environments like mixed-traffic situations, weather changes, or road anomalies.

3. Focus on AI and Data Compliance

• GDPR Adherence: AV systems collect massive amounts of data. Manufacturers must ensure compliance with the General Data Protection Regulation (“GDPR”) to protect user privacy and manage data responsibly. Further guidance is available here. 
• Data Recording and Logging: AVs must record data on system decisions and vehicle performance for compliance with UN ECE R 157 (establishing requirements for type-approval of a new vehicle type with regard to ALKS), ensuring post-incident investigation capability.
• Ethical AI: Prepare for compliance with the European Artificial Intelligence (“AI”) Act, ensuring transparency and fairness in decision-making algorithms, especially in life-critical situations like accidents. Further guidance is available here.

4. Develop Testing and Validation Protocols

• Conduct Real-World Testing: Manufacturers must extensively test AVs in real-world driving environments to demonstrate compliance with EU safety and performance standards.
• Use Advanced Simulations: Simulating complex and rare driving scenarios is necessary to predict how AV systems will behave in potentially dangerous situations, helping refine safety protocols.
• Participate in Certification Processes: AVs must pass through certification by accredited bodies in the EU to verify they meet all legal and safety requirements.

5. Collaborate with Regulatory Bodies and Industry Partners

• Engage with Regulators: Ongoing dialogue with EU and national authorities is essential to stay ahead of upcoming regulations and ensure full compliance with current ones.
• Utilize Regulatory Sandboxes: Some countries offer opportunities to test AV technologies in real-world environments under special regulatory exemptions, allowing manufacturers to innovate safely (such as the “W certificate” required under French Traffic and Road Regulations Code (article R322-3), the "Way Sheet" required under Italian Highway Code (D. lgs. n. 285/1992) and Italian Decree n. 474/2001, and the  "Temporary Transit Permit" under the Spanish Royal Decree 2822/1998 on General Vehicle Regulations)
• Partner with Industry Groups: Collaborating with organizations like the European Association of Automotive Suppliers (“CLEPA”) and the European Automobile Manufacturers' Association (“ACEA”) can provide insights into compliance and facilitate collective advocacy.

6. Ensure Supply Chain Compliance

• Audit Suppliers: Manufacturers should conduct regular audits of their suppliers to ensure components like sensors, software, and other hardware meet AV-specific EU regulations.
• Plan for over-the-air (“OTA”) Updates: AV systems often require OTA updates to maintain compliance with cybersecurity or performance regulations. These updates must be reliable, secure, and approved by authorities.
• Ensure Component Traceability: Implement systems that allow for the tracing of faulty parts to ensure rapid response in case of product recalls.

7. Address Liability and Ethical Concerns

• Product Liability Preparedness: Manufacturers should align their vehicles with the new EU Product Liability Directive under which they can be held accountable for any harm caused by system failures including software products, software updates and AI-driven products. For a comparative analysis of the civil liability regulations that exist in different countries in relation to vehicles and their driving functions at all levels of automation according to the SAE J3016 standard see here. 
• Ethical Decision-Making: AVs must comply with ethical guidelines that address dilemmas in situations like accident avoidance, ensuring the system follows transparent and fair decision-making rules. For example, the European Commission has published a report by an independent group of experts on Ethics of Connected and Automated Vehicles.
• Adapt Insurance Models: Work with insurance providers to develop new models that account for AV risks, while ensuring compliance with EU regulations on liability and insurance coverage.

8. Meet Sustainability Requirements

• Eco-Design Compliance: AV manufacturers must ensure their vehicles meet eco-design standards, including limits on emissions, energy consumption, and environmental impact in accordance with EU laws. Further guidance is available here. 
• EU Batteries Regulation: For electric AVs, manufacturers must comply with the new EU Batteries Regulation in relation to sustainable battery production, sourcing, and recycling, ensuring minimal environmental impact. Further guidance is available here.

Conclusion

It is important for AV manufacturers to prepare in this manner so as to enable them to continue to sell AVs in Europe, to foster trust with consumers, to avoid penalties including heavy fines, recalls, or market bans for non-compliant AVs, and to future-proof technology so as to build AVs that are not only compliant but innovative and market-leading.

AV manufacturers and their suppliers will need to collaborate closely to ensure that components contribute to the overall compliance of the AV. While regulatory liability for the AV falls on the AV manufacturer, suppliers play a crucial role in providing compliant components, and this is governed by their supply contracts with the AV manufacturers.

Get in touch

Lawrence Freeman

Senior Counsel, Bird & Bird, Brussels

lawrence.freeman@twobirds.com

About the author: Lawrence Freeman is a Senior Counsel based in Bird & Bird's Brussels office with over 30 years of experience handling issues of European regulatory, competition, and commercial law both in private practice and in-house roles.

Lawrence joined Bird & Bird in 2018 after having spent 5 years as European Counsel of Tesla, Inc. where he founded the European legal department. At Tesla Lawrence advised both on day-to-day and on highly strategic legal and regulatory issues and developed a unique expertise in regulatory issues regarding electric, connected and autonomous vehicles.

Lawrence is admitted as a Solicitor (England and Wales) and is a member of the Brussels Bar.