Insights from Earl Adams of Hogan Lovells on the evolving regulatory landscape for autonomous driving systems in trucks and passenger vehicles amid technological advancements and industry challenges

Welcome to an exciting Automotive Industries exclusive interview. Today, we have the pleasure of speaking with Earl Adams, Jr., a distinguished partner at the global law firm Hogan Lovells. With his extensive experience at the Federal Motor Carrier Safety Administration (FMCSA), Earl offers a unique perspective on the evolving regulatory landscape for autonomous driving systems (ADS) in both large trucks and passenger vehicles.

As the automotive industry undergoes rapid advancements in technology, the regulatory framework surrounding ADS is a topic of paramount importance. Earl’s insights into the current state of regulations, the challenges faced by developers, and the future direction of policy-making are invaluable. In this interview, we delve into various facets of ADS regulation, from the complexities of federal and state-level governance to the specific rules being developed for driver qualifications and vehicle safety.

Earl’s experience at the FMCSA, coupled with his role at Hogan Lovells, positions him as an authority on the interplay between regulatory requirements and industry innovation. He sheds light on the efforts of federal regulators, such as the National Highway Traffic Safety Administration (NHTSA), to lay the groundwork for comprehensive ADS regulations. Earl also discusses the significant challenges in public perception, workforce development, and the geopolitical strife impacting the ADS industry.

Moreover, Earl provides a nuanced understanding of the differences between traditional AI used in advanced driver-assistance systems (ADAS) and the emerging generative AI technologies powering autonomous vehicles. He addresses public concerns and the need for robust education efforts to ensure the safe and widespread adoption of ADS.

Join us as we explore the critical issues shaping the future of autonomous driving with Earl Adams. His expertise offers a roadmap for navigating the regulatory complexities and technological advancements in the transportation sector, making this interview a must-read for industry professionals and enthusiasts alike.

Automotive Industries interview with Earl Adams, Jr., partner at global law firm Hogan Lovells

Automotive Industries: Hi Earl, with your extensive experience at the FMCSA, how do you see the regulatory landscape evolving for autonomous driving systems (ADS) in large trucks and passenger vehicles?

Adams: The landscape is wide open right now.  The reality is that developers and operators are moving forward with plans to significantly increase the number ADS vehicles on public roads and there are no regulatory hurdles to prevent it.  Until there are federal regulations, the “rules of the road” for ADS vehicles are set by states.  Interestingly, some states have seen bills introduced to limit deployment through “safety driver required” legislation (e.g., CA and DC); whereas other states are actively working to attract developers to their them (e.g., AZ and TX).  The patchwork of rules and regulations isn’t necessarily a negative at this point, especially since the majority of Level 3-4 ADS developers are still in the testing phase or have limited commercial operations.  But, for there to be wider deployment and continued investment, an overall federal regime is necessary.  The current lack of one is not an indicator that federal regulators don’t think the industry needs regulations; rather, in my opinion, it shows how complicated the US rulemaking process is.  I regularly heard from industry leaders during my tenure at FMCSA that they would welcome regulations, especially if they would promote certainty around the critical questions of operational and safety procedures and protocols.

Federal regulators understand the need to act and have been laying the groundwork for regulations for years.  For example, the National Highway Traffic Safety Administration or NHTSA announced the AV Test initiative in 2020.  This program established a process for original equipment manufacturers (OEM) and developers to voluntarily submit road data and best practices related to self-driving operations.  At the same time, in 2021, the Biden Administration published the Standing General Order (SGO) which required—for the first time—OEMs and developers to report all incidents involving ADS-engaged vehicles.  The data collected through these programs will ultimately serve as the basis for safety standards for the industry.  Throughout this period, FMCSA has also been working on a comprehensive rule for heavy-duty ADS vehicles.  I oversaw the team that developed the proposal, and it is my hope that the notice of proposed rulemaking (NPRM) will be published within the year.

So, I am optimistic that the federal regulatory efforts will catch up with current developer actions overall so as to keep the outlook clear for ADS development.  That said, I am tracking two issues that have the potential to slow down the regulatory process—public acceptance of ADS vehicles and workforce development.  I believe that these issues are manageable but will require robust education efforts from policymakers, regulators, safety advocates, and most importantly, industry.  In my estimation, the messaging has to be realistic on timelines for deployment, meaning, “[i]t’s not happening tomorrow”; contain clear and defensible statements regarding the safety benefits of ADS vehicles; and focus on the opportunity for retraining (and higher pay) for displaced drivers.  It will be a challenge but I believe it can be done.

Automotive Industries: Can you shed light on the key differences between the AI technology used in autonomous vehicles and the public perception of AI, particularly generative AI?

Adams: I am not an engineer but what I know is that the automotive industry has used artificial intelligence (AI) to innovate on performance and safety for years.  The technology for advanced driver-assistance systems (ADAS), like automatic braking, adaptive cruise control, and parking assist, uses traditional AI to gather and process data.  Using sensors, traditional AI systems are aware of their environments and can make specific, static decisions like adjusting speed, changing lanes and avoiding some obstacles.  But these systems cannot learn or adapt.  Generative AI systems, on the other hand, also use sensors to process data, but the difference is that they have the ability to predict driving outcomes based on the range of its experiences.  Said differently, as the vehicle drives on the road or runs virtual simulations, it learns to predict, for example, what a vehicle going 20 mph over the speed limit may do and then determines the best minimum risk maneuver to avoid that vehicle.  I have witnessed on several occasions ADS-equipped vehicles make such decisions; thus, the predicative ability of generative AI represents a significant innovation.  That said, this predicative ability also plays into the public’s perceptions and fear of AI in general.

Currently, the public and policymakers are concerned that AI systems will make predictions that disadvantage classes of people (e.g., race, gender and age) and will lead to inequitable outcomes.  A good example of this worry may exist in consumer sectors, like banking or retail, where people are concerned that the AI may predict the likelihood of defaults or make credit decisions based on protected characteristics.  In my estimation, such concerns are not really relevant in the transportation section.  Simply put, the AI algorithm in the transportation sector is focused on “what is happening” and is not concerned about “who is doing it.”

Automotive Industries: What are some of the most significant challenges in developing policies and rules for driver-assisted and autonomous driving systems?

Adams: As I noted above, I am concerned about public perception of ADS-operated vehicles.  Public awareness and acceptance of self-driving technology has the potential to slow or derail regulatory and commercial timelines.  Surveys have found that a significant percentage of Americans have some concern about self-driving technology, and although regulations are not set by public opinion, policymakers and regulators will be responsive to these concerns, perceptions and protestations.  Although the public has grown to accept ADAS systems with degrees of autonomy, like parking assist and adaptive cruise control, it took public outreach and education.  These Level 2 systems were originally viewed as novelties, but are now viewed as necessities by some and are even celebrated for their ability to advance a range of policy objectives, like increasing mobility and enhancing safety.  I don’t think the lack of public acceptance will doom ADS development in the long term, but it has the potential of making the rulemaking process more complex and elongated (e.g., lawsuits). I referenced workforce development in my first answer as a second issue, but like with public acceptance the answer to bringing along labor is also education and honest dialogue. A third challenge directly impacting policy and regulatory development for ADS vehicles is geopolitical strife, like the trade war between the US and China.

The complex issue of managing safety while ensuring fair trade and protecting US national security interests has created significant hurdles for the sector in the US, especially relating to software, parts and equipment.  LiDAR systems, which are the crux of self-driving and driver-assist systems, have been in the crosshairs of US policy makers because the majority of them are sourced from China.  As such, there is an existential regulatory impasse because the necessary technology to ensure safety is produced by a foreign competitor. Though we cannot predict how safety regulators will thread the needle, it is possible that they may be hesitant to set a safety standard naming equipment that may be unavailable, thus slowing down the regulatory development process. This type of tension, though likely to be solved over time, still represents a significant challenge for the industry. Thankfully, developers and OEMs are aware of this issue (I regularly counsel clients on it) and are making plans to find new sources of critical equipment.

Automotive Industries: How do multiple government agency regulations and policies impact the deployment of autonomous self-driving vehicles and trucks?

Adams:  In short, the federal regulatory oversight scheme for ADS vehicles is managed as followed: vehicle safety aspects are regulated by the Department of Transportation; the Environmental Protection Agency governs the vehicle’s emissions; the technology and products in the vehicle are overseen by the Department of Commerce; privacy and data collection from the vehicle are directed by the Departments of Justice and Homeland Security; while workforce issues and national security concerns related to the industry in general belong to the Department of Labor and Department of Defense, respectively.  At the same time, state and local governments are also involved in regulating the “rules of the road” on which the vehicles operate.  The bottom line is that the interplay between federal, state and local agencies and governments is extensive and complex.  Thankfully, ADS vehicles are not the only sector where this complex web exits, for example, a similar oversight/compliance tree could be drawn for the agriculture sector.  Regardless, because of the complexity and multi-agency dynamics, the White House is typically involved.  Both the Trump and Biden White Houses coordinated activities related to self-driving vehicles thus demonstrating that this is a non-partisan issue.  The simple reality is that self-driving vehicles are on the road so all levels of government have to be engaged to ensure their safe operation.

Automotive Industries: Can you discuss the specific rules that agencies like the FMCSA have released regarding driver qualifications, registration requirements, and safety for self-driving trucks?

Adams: To date, FMCSA has not released any final rules regulating any aspect of ADS vehicle operations, including registration or driver qualifications.  The agency did issue an advanced Notice of proposed rulemaking (ANPRM) in 2019 and a supplemental advanced notice of proposed rulemaking (SANPRM) in 2023, where it asked a series of questions relating to the safe operation of self-driving heavy-duty vehicles.  Both the ANPRM and SANPRM were the agency’s attempt to engage industry, safety advocates and the public to identify which of the existing regulations might need to be revised or amended to facilitate the safe operations of ADS commercial vehicles.  In addition to the preliminary rulemaking proposals, the agency also conducted multiple stakeholder outreach activities and funded millions of dollars of research in key areas (e.g., reacting to first responders).  In the end, the goal is to facilitate safe outcomes while avoiding unnecessarily hamstringing the industry.

Automotive Industries: How are current USDOT activities shaping the future of highly automated systems in the transportation sector?

Adams: There is a lot of activity at USDOT relating to self-driving technology.  USDOT’s Office of Research is leading department wide efforts through its Highly Automated Systems Safety Center of Excellence.  The Center has convened multiple meetings around issues of AI Assurance in transportation and issued a Request for Information on the use of AI in the transportation sector.  The outcome of this work will significantly accelerate the data collection and analysis process across USDOT.

Automotive Industries: What effects are supply chain issues having on the autonomous truck and self-driving vehicle market, and how is the industry addressing these challenges?

Adams: As I noted, ADS developers have started to identify new sources for critical components, like LiDAR, as a result of supply chain issues caused by the US/China trade issue.  In addition to the trade limitations, other geopolitical challenges, including the wars in the Middle East and Ukraine and residual supply chain snarls caused by the pandemic have also impaired the ability of some developers to source products.  Unfortunately, I do not think there is a silver bullet to solving these issues, as they are bigger than any one sector.  We have counseled our clients at Hogan Lovells to invest time and resources in identifying product sources in trade-allied countries.  We also have clients taking advantage of US incentives to manufacture their own products here at home.

Automotive Industries: Given your experience with airfield development projects and airport operations, what lessons can the automotive industry learn from the aviation sector regarding safety and regulation?

Adams:  From a regulatory standpoint, the aviation sector has considerable experience managing innovation, like the use of autonomous systems, so it can teach the surface sector a great deal.  As we know, autonomy has played a significant role in flying airplanes for years, and it has even increased the efficiency of moving equipment, bags and passengers around the airfield.  Generative AI systems are also being deployed now at airports to set maintenance and repair schedules, predict crowd movement and to improve safety.  Again, all of these experiences are transferrable to the surface transportation sector.  My former colleagues at FMCSA and I often looked to the FAA for insight and best practices.

Thus, as surface regulations are being developed, the FAA’s experience with self-certification, in particular, can be very instructive. The entire world saw what occurred with the 737 Max situation, where significant flaws in the self-certification process were revealed.  In the case of ADS-equipped vehicles, developers will hold the majority of data so some level of self-certification will likely exist.  That said, just as the FAA has adopted better oversight protocols and compliance checks, NHTSA and FMCSA should watch and learn so as to avoid any similar and unfortunate outcome.

Automotive Industries: How do you see the role of legal counsel evolving in the face of increasing technological advancements and regulatory complexities in the transportation industry?

Adams: The role and skills required for legal counsel will evolve as ADS deployment increases.  In my opinion, lawyers servicing this sector will need to understand both the rules governing ADS operations, as well as have a solid understanding of the technology and engineering of ADS and AI systems.  This is not to say that lawyers will need to be engineers only that they will need to be able to articulate the way these systems operate and “don’t” operate to be successful advocates before various constituencies, including regulators, investors and the public.  At the same time, since these systems are still in their development phase, questions of liability, warranties, standard terms & conditions are matters of first impression.  As such, successful legal counsel will have to be comfortable navigating in unchartered waters and be willing to be creative in their thinking to answer these questions.  Effectively, we have returned to the dot.com era where lawyers must be able to play a cooperative and collaborative role in the developmental life cycle of new products and technologies.