The Automotive sector: Latest tech trends

The ever-evolving Automotive sector is solidifying its relationship with technology. Not only with automobiles, as is increasingly evident, but also in connected areas such as shipping, aviation and supply chain automation as a whole.

For those active in the Automotive Tech space, trends and strategies are increasingly discussed, analysed and assessed. Wherever any software, platform, API and/or data sharing is involved, lawyers should be paying careful attention.

Autonomous driving, for example, is constantly in the news. But behind the attractive and futuristic headlines sits a growing technological infrastructure, built to ensure that the vehicle can 'sense' its surroundings, distinguishing roads, trees, other vehicles, pedestrians, and buildings from each other.

Nowadays, many vehicles already have an Advanced Driver Assistance System (ADAS) that implements the autonomous driving infrastructure (in certain cases, such implementation will be mandatory from July 2022 to comply with EU Regulation 2144/2019) – but true autonomous driving is something more and requires a paradigm shift (is “Level 5” still a myth?).

A vehicle’s perception of its environment must be extremely accurate; this is why (for example) Mobileye N.V. has developed “EyeQ Ultra”, a system which collects data through cameras placed all over the vehicle. This system should enable its vehicles to reach a “Level 3” of autonomous driving. As lawyers, we will be required to understand how its collection of such data can be controlled to ensure that Mobileye meets all relevant legal requirements, given that the “EyeQ Ultra” system will be implemented on cars as early as 2023. It is legitimate to suppose that Mobileye itself will be the Data Controller – unless otherwise agreed with car manufacturers. And what about the data that is transferred outside of the EU? What if the vehicle itself becomes an open-source infrastructure?

Shifting our attention to the seas, another interesting field of application for Automotive Tech relates to so-called Decision Support Systems (DSS) on ships.

Such systems are already in use, but are currently limited to safety matters (such as the prevention of fire and flooding) on cruise ships or military vessels. Considering that a large number of applications (software and modules with the ability to intervene at different levels) are integrated into the Safety Monitoring and Control System of a vessel, DSS should assist the operator in making decisions at a higher level.

To achieve this result, it is necessary to merge and analyse information from multiple inputs, including computers, sensors and even the operators themselves. Legally speaking, what about the risk of an API gate and/or the opensource bug which may impair the navigation system? Should any liability arise vis-a-vis this melange of data?

Back to the shore: in the context of the EU’s desire to reduce Member States’ CO2 emissions through the application of technology within the Automotive space, a significant part of the effort could be shouldered by the trucks and buses which flow through the cities and across countries – given that 25% of total emissions in the EU come from such vehicles.

Various regulations have been adopted with the aim “to provide a clear pathway for CO2 emissions reductions from the road transport sector and… to [meeting] the binding target of at least a 40% domestic reduction in economy-wide greenhouse gas emissions by 2030 compared to 1990”². The EU Commission issued its Regulation 582/2011 to lay down some specific technical requirements for the CE type-approval of heavy-duty vehicles with a specific regard to emissions. Subsequently, the EU Regulation 2400/2017 provided for (i) certification of vehicles’ components having an impact on fuel consumption and CO2 emissions; (ii) software for the simulation and assessment of CO2 emissions – the “VECTO tool”; and (iii) rules for licensing of VECTO.

Such software enables companies to estimate the emissions of the vehicle by measuring data from various vehicle components (efficiency maps, etc.) – and it can be applied to all vehicles with the same components.

Finally, another fundamental step has been made by the EU Institutions with regards to emissions: the shipping sector is now included within the European Trading System (ETS), and will become subject to the world’s largest carbon market as of 2023.

The ETS derives from EU Directive 2003/87/CE, with the aim of creating a system of exchanges of emissions quotas between companies operating within the system. The EU Commission on 14 July 2021 proposed to add shipping to its carbon trading market with the aim of piling pressure onto an industry that, until now, has avoided the EU’s pollution charging system and which is the cause of 3% of the world’s CO2 emissions.

What if VECTO software, along with an effective exchange system for emissions quotas, are bridges to wider ESG compliance – driven and supported by data and AI for measuring success?

This clearly represents another link between Automotive, Tech, data and ESG and CO2 emission programmes – which, together, are some of the most important and pressing areas of concern in the development of our planet.

Finally, a legal and philosophical question: in almost all new vehicles (whether on the road, at sea, in the air or on the track) a large array software and function modules must operate together seamlessly. Additional modules to incorporate the technology described above will likely require add-on and update functions without influencing all the others – or even having to re-boot the system.

Is the aim to have one master software controlling all the others? Is there a risk that this becomes a bottleneck of issues such as (i) antitrust; (ii) data controlling and relevant liabilities; and (iii) future regulatory developments…?

Our Simmons Automotive Tech group team will continue to monitor developments. We’d love to hear your thoughts on these issues too.

¹ Level 5 represents a fully automated vehicle, where the vehicle is capable of performing all driving functions under any conditions. This means that while a human can take over driving if desired, it is not necessary. The end goal of Level 5 is for every vehicle on the road to be fully automated. There are currently no public examples of Levels 4 and 5 (high automation and full automation)
² See Recital (5) of EU Regulation 1242/2019.