Inside Germany's Autonomous Driving Law: The Hurdle Nobody Has Cleared

Welcome to Autonomy Insiders. The show where global industry leaders in autonomous driving unpack their real world insights. Welcome to Autonomy Insiders, I'm your host Daniel and Germany did something unusual in 2021. Before a single robot taxi was operating anywhere in Europe, the country rode a full legal framework for driverless vehicles and regular commercial servers. So the autonomous driving act then the AFGB regulation in 2022, it was at a time the most complete level follow in the world. And now four years later, the picture is more complicated. It's a way more runs thousands of driverless vehicles in the US. China has multiple cities in commercial operation. In Germany, Moya started carrying passengers in Hamburg, but still with a safety driver behind the wheel. So what does the German law actually require as a question that I get often? And today, we want to dig into this and not the headline version, so the real version. So which permits from which authority, in which order, and what has to be in the fireland. My guess today is Tish Daegermann. He is a lawyer at Royal and Berlin. And he advises cities, transport operators and companies on autonomous mobility. And he also co-authored the innovation paper on driverless passenger transport for the German association of transport operators. And he writes regularly on where this framework works and where it does not. So he has a really good LinkedIn page and I would recommend to follow him there as well. So till welcome to autonomy insiders and so happy to have been shown today. Yeah, thanks Daniel for the invitation. I'm always happy when people show interest in autonomous driving since the topic has fascinated me since I was a kid. So let's start at the top and work down. I want us to build a whole picture before we judge any of it. So Germany has two separate instruments here, the STVG, so the Road Traffic Act, Amendments from 2021 and the AFG BB from 2022. So what does each one do and why did the legislators split it that way instead of writing one law? This is a deliberate division based on a regulatory logic. 2021, amendments to the STVG constitute the overarching framework law. They define fundamental concepts such as operating permits, technical supervision and liability provisions. They are, so to speak, the foundation and the AFG BB, BB of 2022 is then the specialized implementing regulation that governs the details. This division makes it possible to keep the foundation stable while allowing for more flexible adjustment to the technical requirements or procedures within the regulation. So this is also legally a sounder. The strategic architecture remains in the STG STVG while operational issues are addressed in the AFG BB. And the AFG BB title contains also a phrase that does a lot of work. So this is called in German in Feskelegenbetriebsberechen, which means in in defined operating areas. So how much of this entire regulatory design follows from that single choice? This single sentence established autonomous vehicles are not permitted to operate everywhere, but only within predefined approved operating areas. This turn term runs like a common threat throughout the entire regulatory framework. And as a result, there are two separate approval processes. One for the vehicle itself and one for its actual operating area at the defined location. And it also explains why the ODD, the operational design domain, description is so crucial, because only by referring to the ODD, can one verify whether the vehicles capabilities are or and the operating locations truly aligned. After all, the operating area or specific requirements must never exceed the vehicle's capabilities and thus the ODD. However, the restrictions, this restrictions is not unusual. Rather, it is a central component of the level 4 logic in which unlike at level 5, the vehicle cannot drive autonomously everywhere, but only within a defined area and thus without a human fallback. So you touched already on the SAE levels and the German law does not use the SAE levels as its legal categories. So it has its own definition and paragraph 180, paragraph 1, age of the road traffic act. So can you walk me through the legal categories that actually exist and where the SAE mental model maybe also misleads people? German law does not use the SAE levels as legal categories. The SAE levels describe the technical degree of automation or office system. So the STVG on regulates its legal roles, responsibilities and conditions of use. And since the reform a simplified distinction has been made between automated driving functions under paragraph 1a, STVG, which essentially corresponded to SAE levels 3 and autonomous driving functions under paragraph 1d or section 1d, STVG, which essentially corresponded to SAE level 4. The key difference is that 1a continues to require a driver as a fallback, whereas 1d assumes that assumes a system that must function within a defined operating range without a human fallback. This is precisely where the SAE conceptual model is often misleading. It describes the technical level of automation but does not explain the legal requirements, responsibilities and operational limits of a system. In particular, the central role of the defined operating domain cannot be deduced by the SAE classification. In particular, the central role of the defined operating domain cannot be deduced from the SAE classification alone. The paragraph 1d of the DROD traffic act defines also the easy-community-malad solution in German, which is the minimal risk condition. That sounds like a real technical term but it has also legal consequences. What are the legal consequences? The minimum risk state describes the state into which an autonomous vehicle must transition when it can no longer safely continue its driving task. For example, due to technical malfunctions, system limitations or other safety-related events, although the term sounds technical, it has significant legal implications. The ability to autonomously enter a low-risk state is one of the key requirements for the approval of autonomous vehicles. Manufacturers must demonstrate that the vehicle can reliably implement this safety concept. And before we now get to the process, so who is the accuracy of this regulation? So is the AFG-BV primarily written for manufacturers? Is it for operators or for whom is it? Formerly, it is addressed to all three parties. But in practice, it focuses on the one group, the applicants that is manufacturers and operators. They need to know what they must submit and in what format and with what content. The authorities play a secondary role. They are the recipients and the applications must evaluate them in accordance with this regulation. Right, so now let's do this as a practical sequence. So say I am an operator and I want driverless vehicles and carrying passengers in a German city. So the third thing I need is a legal vehicle. So take me through that depth. So the betriebs are loudness or the operating permit under the paragraph one eA-STBG and the paragraph two to four AFG-BV. So who applies for that to whom? The manufacturer applies for type approval from the KBA, which is the federal motor transport authority. which has central jurisdiction throughout Germany. A Black applicant must include a wide range of documents, the functional safety concept, the IT security concept, the operational design domain description, technical documentation for the vehicle and the evidence of system testing. In principle, it is a complete dosky demonstrating that the vehicle meets the requirements. The KBA then verifies whether the vehicle can operate safely within its defined ODD. I paragraph three of the AFGB lists all these required documents. So as you said, like the functional safety concept, IT security concept, the ODD description and much more. So which of those items is the one that actually takes the longest and also causes most applications to stall? Since I haven't yet been involved in an approval process, manufacturer's side, I can't speak from personal experience, but only from what I've heard from others. In that regard, I'd say the functional safety concept is the biggest challenge. Since manufacturers have to figure out the ale, they will demonstrate that their vehicle meets the requirements. And so far, no one has managed to apply for the regular approval. And thus, submit a concept that the technical inspection agencies considered good enough to deem it ready for approval. The challenge is to develop a rationally that proves safety and capability while simultaneously enabling the technical inspection agencies to test whether the rationally actually delivers what the manufacturer claim. And secondly, whether it is even suitable for providing the required proof. So in my view, that is the biggest hurdle, which no one has cleared yet. And the manufacturer defines the conditions the vehicle is allowed to drive in. So the ODD, as we now have decided, when it applies to the KBA. But the operating area is applied for afterwards. And this is done by the operator and at a different authority. So who checks that the two actually match? In principle, the authority responsible for approving the specified operating domain is also the specified operating area. It's also the authority that must assess whether the requested operating area is compatible with the vehicle's capabilities and ultimately with its ODD. It will regularly rely on the assessment of a technical testing service. The testing services analyzes whether the capabilities approved for the vehicle and the conditions in the requested operating area are actually compatible. Based on this assessment, the competent authority then decides to approve the operating area. Therefore, I would not say that no one checks the alignment between the ODD and the operating domain here. The check does take place, but only during the operating domain approval process and not during the vehicle approval process. Like Sense and Paragraph, one E of the Road Traffic Act sets out what the technical equipment must be able to do. And one requirements end out, so the vehicle must handle the driving task safely in all situations within the approved area. So how is that assessed in practice? And is all situation also a legally achievable standard? Wording of the law does not explicitly refer to all situations. Rather, Section 1E of the Road Traffic Act requires that the vehicle be able to perform the driving task autonomously within its approved operating range. At first glance, this sounds similar, but makes an important distinction. Or if one were to interpret all situations literally, the standard would be practically impossible to meet. Neither a human or an autonomous system can predict or test every conceivable traffic situation. German law therefore takes a different approach. It does not require the vehicle to perfectly handle every theoretically conceivable situation. It requires that the vehicle can be operated safely within its approved scope of operation. That is also-- when that it also reacts safely to situations, it cannot resolve on its own. This is precisely where Section 1E contains a whole series of additional requirements. The vehicle must recognize its system limitations. And in case of doubt, it must autonomously put itself into a state that minimizes risk or minima risk state. This means that the leg is ledger evaluates not only the vehicle's ability to continue driving, but also its ability to safely stop driving. In practice, this is demonstrated through a combination of safety concepts, validation, evidence, simulations, et cetera. The manufacturer must convincingly demonstrate that the autonomous driving function operates safely. The real challenge, therefore, lies in providing this evidence. How does a manufacturer show that its safety case is sufficient? How many scenarios must be tested? How much simulation is enough? That is precisely where the actual regulatory debate lies today. And how does the KBA actually test this? So is it, then, a documentary view, physical testing, simulation as you mentioned, all three, and who is also qualified to do the assessment? The KBA has considerably discreetion in the testing process. For example, the Federal Office for Information Security is required to participate only when assessing the information technology security concept. Otherwise, the KBA may engage an officially recognized expert. There's some debate over who qualifies an expert as certain universities now see themselves in this role alongside technical testing services as TIFF or DICHA. The Federal Highway Research Institute bust is currently developing a test catalog design to enable technical testing services to the kind of driver's license test for autonomous vehicles. OK. And another topic is software updates. So when autonomous driving system changes continuously, so what does the AFGBD requires when the software behind and approved vehicle changes? And does the framework handle that well? The AFGBV states that modifications to the or updates to the vehicles require approval from the KBA. And it's not specified whether this refers to all modifications or updates or only certain modifications above a certain security level. However, I would assume that there's a distinction between minor and major updates and that only major updates require approval. Therefore, the issue is likely not whether you repair the window regulator but rather updates that affect the system safety. So now I have an approved vehicle, but I still cannot carry a single passenger. So that is the second permit. And it comes from a completely different authority. So the approval for the operating area under the paragraph seven to nine of the AFGBV, so who is there, the competent authority, and how does that differ from state to state? This is decentralized, and that's one of the trickiest issues. Approval for the operating area does not come from the KBA, but from the state authorities or in the case of the Federal Highways centrally from the Autobahn GmbH. This means that an operator may potentially have to negotiate with at least 16 different authorities if he wants to expand nationwide. So for example, if the operating area there crosses a state road, a country road, and a municipal road, then these three authorities, each further respective section, falling under their jurisdiction are the competent or permitting authorities, even if it involves only a single operating area. So what does an applicant have to submit to get an operating area approved. The requirements set forth in the paragraph eight of the AFGBV and are too extensive to list in their list, the entirety. Essentially, the owner must demonstrate where they intend to use the vehicle and that such use is both feasible and safe given the vehicle's capabilities. Another important aspect is the owner must submit the vehicle's operation, operating permit. Thus, they cannot obtain approval for an operating area on a whim, but can only do so for a specific vehicle. In addition, they must also provide information about the individuals they intend to implement the duties of the technical supervision and maintenance personnel, for example, criminal background checks, etc. In June, a first practical assessment for an operating area was trialed in Berlin, so effectively a driving test for the vehicle and real traffic. So, what was being tested there and does that point to how these approvals will work at scale? The focus there was less on the vehicle itself and more on the testing methodology. The Berlin real world test was the practical trial to determine how an autonomous vehicle could be evaluated as a part of a future operational area approval. The testing teams observed the vehicle in real world city traffic and assesses whether its driving behaviour could be evaluated in a transparent and reproducible manner based on objective criteria. This is important because German regulations do not merely ask whether a vehicle is fundamentally capable of driving off. They also ask whether it can be used safely within a specific operating area. This requires procedures that go beyond mere theory or document reviews. So, we are beginning to develop standardised testing procedures for area specific approvals and these are precisely the kind of procedures we will need if autonomous mobility is to be approved on a larger scale. It makes sense. Suppose the approval is granted and then something in the area changes. So, a long-term road works, a new tram line, a redesigned junction. So, does the operator need a new approval and also who monitors that? There's no centralized markets surveillance such as that conducted by the KBA for the autonomous vehicles for operating areas in that sense. However, the regulatory authorities responsible for approving the operational area may verify at any time whether the requirements for the approval are still met and the operator is required to report any changes. As a general rule, there's no guarantee that an operating area once approved will remain available indefinitely. The scope of this new or amended approval will then depend on the significance of the change. The Federal strategy sets also a target of the world's largest conductors operating area by 2028 and under current legal mechanics. So, what would that actually require procedurally? We are only at the beginning of this task since the issue of operating area approvals has only really been on the agenda since this year. The problem described above with the responsibilities that may not be even defined at the state level and the resulting fragmentation of authority among road construction authorities would certainly be one of the biggest obstacles. All right, so now we're two permits down, but the law also regulates the people and the organization behind the service. This is the part I think most people outside Germany completely underestimate so in Germany there's the technical off-sicht, so the technical supervision and German law defines it as a natural person with a specific set of powers, not a control room, not a remote driver. So, what exactly made that person do and what are they forbidden from doing? The technical supervisor is the person who can interact with an autonomous vehicle. However, this is limited to authorizing or specifying driving maneuvers. This is only possible when the vehicle is at a standstill direct control, however, is not possible. The technical supervisor might even authorize maneuvers that in theory violate traffic regulations such as crossing a solid lane marking. The technical supervisor should therefore not be confused with someone who, for example, works in a call center and communicates with passengers and paragraph 14 of the AFGV sets requirements for that person. So, what qualifications do they have and what is the racial question? So, how many vehicles can one supervise? There's no set limit on how many vehicles a technical supervisor can oversee simultaneously. It is therefore possible in principle for technical supervisor to oversee 50 or 100 vehicles at the same time. An operating system must essentially only ensure that every vehicle should it ever reach its operational limits can contact the technical supervisor. The qualification requirements are quite high as engineering degrees are required and in this case only engineers from specific disciplines such as autonomous automotive engineering. However, the AFGV has an interesting mechanism. The primary technical supervisor can delegate tasks and the individuals whom these tasks can be delegated must meet single significantly lower requirements. In this case, three years of professional experience in the automotive sector as well as training provided by the manufacturer are sufficient. A quick side note, there is also maintenance personnel who face similar high requirements. Here at least for now, there's no possibility of delegating tasks to less highly qualified stuff. It's a bit interesting and paragraph 1, AFGV after road traffic act puts the obligations on the holder of the vehicle. So, what are they and how do they differ from what a conventional fleet operator is used to? The owner of an autonomous vehicle must keep the vehicle road worthy and this applies regardless of whether the vehicle is autonomous or not. However, the owner must also or the owner of an autonomous vehicle must also ensure the vehicle is operated in accordance with its permit. For example, within its permitted operating range and within the designated operating area. In addition, they must ensure that the systems are maintained in accordance with legal requirements. This includes the daily extended pre-trip inspection during which, for example, the sensors and safety critical vehicle systems must be checked, followed by a so-called comprehensive inspection every 90 days in accordance with the manufacturer's specifications. And finally, the semi-annual general inspection, which, to my knowledge, also applies to conventional fleet vehicles. It is also the owner's responsibility to ensure that the technical inspection is carried out. In addition, the owner must ensure compliance with the regulations that were previously directed at a driver present in the vehicle. How the owner accomplished this is up to them. In some cases, exemptions from certain applications may be granted, such as the requirement to set up a warning triangle. And finally, the owner must also store defined data, such as location data or the number and times of maneuver authorizations, for example, which they may be required to submit to the operating area approval authority, if the authority requests this data. We now have covered the road traffic law, but to carry paying passengers, you also need a permit under the Passenger Transport Act. So how do the AFG-BV track and the Passenger Transport x, interact and can they be run and parallel? must ABM sequential. - There are two separate regulatory systems. The AFGBV governs the vehicle technology and the operating permit for the autonomous system. And the PBFG governs the authorization to transport passengers for commercial purposes. Since the PBFG authorization is not tied to a specific vehicle, but applies to the provision of a transportation service. The PBFG authorization can, and principle also be granted in advance, for example. - And liability insurance is also a topic and the autonomous driving act amended the compulsory insurance act alongside the road traffic act. So where does the liability actually sit when an approved autonomous vehicle causes damage and has that question been tested yet? - The interesting thing is legally speaking, the issue of liability is actually less open-ended than many people think. Even with autonomous driving, traditional owner liability remains in effect for the time being. Anyone who operates a vehicle and uses it on public roads remains liable for the damages as a general rule. It's just that the driver is no longer considered a separate party. In addition, manufacturers may be held liable. For example, if a software or system error is cost, is the cost for the accident. Mandatory insurance ensures that victims actually receive compensation. What is truly new is that responsibility is shifting more towards manufacturers, operators, and technical systems and no longer rest with the human driver. And principle one could also consider state liability. However, this will remain the exception. Issuance of an operating permit by the federal motor transport authority or an operating area approval by the competent authority is no guarantee that an accident will never occur. For the state to be held liable, it would be necessary to prove on a regular basis that the authority violated its duty to inspect and that this specific error was the cause of the damage. In practice, this is likely to be difficult in many cases. Let's widen out. So Germany's framework does not exist alone. So there is a new road to vehicular approval. And as of some weeks ago, there is also now an UN framework too. And I want to understand how these three fit together and where they may be also compete. So the implementing regulation, the 2022, the 1426 gives a manufacturer an EU-wide route to the autonomous driving system type approval. So a manufacturer can choose that instead of the German national operating approval. So what are the real trade-offs between the two routes? Both the approval another AFGBV and another regulation, 1426 are very similar. Since regulation 1426 is a copy of the AFGBV. Nevertheless, say two different types of approval where the AFGBV allows for the approval of only 250 vehicles per year per manufacturer. Regulation 1426 allows for 1500 vehicles per year per manufacturer. Furthermore, approval under 1426 is valid throughout the EU whereas approval under the AFGBV is generally limited to Germany. And in March of this year, the Commission amended the 1426 through implementing regulation, the 2026 and 481. So it added automated valet parking and moved away from this small, serious limitation that talked about. So how significant is that in practice? I think this will initially pave the way for mass produced vehicles with AVP. Even more significant will be the implementation of the UNECE regulation on autonomous driving, which was adopted in June. And this UNECE regulation will also be incorporated into the framework of regulation 2018, 858. And will then apply to mass production as well. And even within EU type approval, the operating rules stay national. So a vehicle approved EU-wide still cannot simply drive in Vienna or Munich under one permission. So is that a design choice that you intend to keep or is it a transitional state, so to speak? Ultimately, this is a question of how much authority one wishes to grant to the EU. So far, the EU has not been granted the authority to regulate road traffic in the member states. So the member states themselves remain responsible in this area. This means that operating approvals also remain a national matter. At the moment, I find it hard to imagine that the EU would be granted additional powers. However, I can imagine that the member states might, so to speak, voluntarily agree on a certain standard and procedure allowing them to mutually recognize permits or to conduct technical oversight across national borders, for example. So how does that UN instrument get into German law? And what is the realistic timeline? Does it eventually place parts of the AFGB or sit alongside it? Many EU regulations are published for six months with member states the opportunity to raise objections. After that, they can be incorporated into respective legal frameworks. In the EU, this will be regulation 2018, 858, which serves, so to speak, as a foundation of vehicle regulation. The AFGB will lose some of its relevance. This is because the AFGB is unlikely to play a role in vehicle specific approvals anymore, since there will be then be the EU-wide harmonized approach provided by regulation 2018, 858, and which production vehicles can be approved in unlimited series. However, the AFGB will remain relevant for the operating area approvals. This is because the operating area approvals remain within the regulatory purview of the individual EU member states. In my view, it is important to understand that the new UNICE E-regulation seeks to set global standards regarding safety arguments. However, in my opinion, it is essentially a further development of the AFGBV and should therefore not be as new to European manufacturers at the grappling with these safety argumentation issues as it is to manufacturers from the US and China. Now that we have the whole map, I want your assessment. So you had wise on this every week, so you see where it works and where it is not. So Germany wrote the first level for regular operation framework in the world, and then it did not become the first market. So is that a problem with law, with how it is administered or with something else entirely in your opinion? It is so complex that no manufacturer has been able to provide it to such a high standard that a technical service has given them green light to the applicant. In other words, no technical inspection service has found the argumentation convincing so far. And Bitcoin published a position paper in February with concrete AFGBV amendment proposals. So the fifth road traffic act amendment came in May and did not really deliver a substantial reform. So if you could change three specific provisions in the AFGBV, so which three and what would you change them to? I will mention two. The first is that maintenance personnel must meet the very high qualification requirements. Similar to the technical supervisors, they must be certified automotive technicians or engineers. But unlike technical supervisors, maintenance personnel cannot delegate this task. So this will likely create a new shortage of skilled workers. And I am not currently aware of any sound argument stating that an engineer must necessarily be the one. to perform the preacher inspection. The second point is the ban on commercializing the test permit. Essentially, however, this is not a matter for the AFGBV but for the STVG. There are good reasons both for and against this. Ultimately, this is a political decision whether to allow commercialization and thereby open the European fortress or keep it closed. Because as soon as commercialization is permitted, companies particularly new will enter the market. These companies are already technically ready and are now working on regulatory readiness but have enough money and perseverance of a large-scale commercial pilot operations. And thereby become a significant player in the transportation landscape. Maybe one less question for an operator or a city listening to this today and planning maybe a launch. So what should they be starting now in what order and how long should they realistically budget from first position to first paying passenger? My recommendation is always don't start with a tender right away. That's because no manufacturer currently holds a genuine level for certification and can therefore readily deliver on what it promises in a tender. Generally speaking, it is good to know what requirements you want the vehicle to meet. In other words, what specific task it should perform in traffic. However, you shouldn't get too bogged down in the details. Instead, focus on what the absolute must have features. Since we are still waiting for the first vehicle approval, I always recommend first thinking about operations and operational area. There are plenty of questions there, such as those regarding personnel for technical supervisors and maintenance. Then there's the question of how technical supervisor integrated whether you want to handle this yourself or purchase it as a service from the manufacturer. And finally, of course, where the vehicle is supposed to operate and whether this is a realistic feasible area or one that involves too many highly complex or challenging conditions, for example, self-service, difficult traffic management, etc. Perfect. You think we covered a lot of crunch details, so thank you very much for taking the time today and that you walked us through the whole regulatory landscape in Germany, so it was really insightful conversation. Thank you very much for taking the time.