Regulating AV tests: The murky waters of autonomous vehicle safety

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  Quantumrun Foresight
• February 20, 2023

As autonomous vehicle (AV) technologies continue to develop, lawmakers are increasingly confronting the challenges these vehicles may experience in live traffic environments. The technology is complex, so regulators must be vigilant to avoid under- or overregulating it. Too little regulation could result in less safety, while too much regulation could hamper innovation and minimize the adoption of a critical future technology.

Regulating AV tests context

Autonomous vehicles can contain a wide range of systems, including sensors, radars, ultrasonics, cameras, and LiDARs (laser imaging, detection, and ranging) that generate significant amounts of data. Additionally, artificial intelligence (AI) systems use deep learning and neural networks to analyze this data and make appropriate driving decisions. Not only are AVs complex machines, but their interactions with other traditional vehicles and pedestrians, as well as their communications with other AVs, infrastructure, and devices, further complicate matters.

If left unregulated, these vehicles can negatively impact cybersecurity, privacy, ethics, environmental practices, mobility, and accessibility options. Accordingly, it is crucial that these machines are thoroughly tested across different real-life situations to gauge their suitability and readiness. However, as of 2022, many countries still struggle to implement national safety laws regarding the deployment and testing of AVs.

In the US, the most active state in terms of AV development is California. In 2018, the state established the Autonomous Vehicle Tester (AVT) Driverless Program to test AVs without any human operator. Automakers who successfully apply to the program are given two-year permits to test their vehicles in designated sites. Over 50 self-driving firms have tested their technologies in California. However, other states are yet to catch up.

Disruptive impact

As of October 2022, there are only 34 out of 50 US states that have regulations on AV testing and deployment, according to the Insurance Institute for Highway Safety. Each state has specific rules on the levels of automation allowed and whether human operators are required. For example, Alabama allows deployment but doesn’t require operators to be inside the vehicle. Meanwhile, California requires an operator license depending on the type of vehicle automation. 

Other states, like Hawaii, Illinois, and Maine, are still in the testing phase and don’t have concrete requirements. Additionally, not all states require liability insurance. For those that do require it, the amounts differ. California, the District of Columbia, and Connecticut require at least USD $5 million, while Alabama and Louisiana mandate only USD $2 million.

Clearly, the regulatory environment is fragmented and will remain so until US federal laws are imposed. This trend will result in conditional and situational rules, and leaves automakers in limbo. For example, Cadillac’s Super Cruise product uses AI to provide hands-free driving assistance. Because of this, autonomous car services will likely arrive first in areas with permissive testing sites and regulation. 

Meanwhile, some experts suggest that public education should also be prioritized. For example, learner’s permits or driver’s licenses for AI-enabled autos will help acquaint the technology with people and establish expectations and protocols while driving. To make AVs safer, they need to be tested under conditions similar to where they will be driven most often. 

Implications of regulating AV testing

Wider implications of regulating AV testing may include: 

• Local governments conducting forums with their communities to slowly introduce AV testing in their respective neighborhoods. There might be pushback from some community groups, particularly those worried about safety. 


• Federal governments being pressured to create comprehensive testing and deployment policies, although implementation may be challenging and fractured.


• Countries and states with testing sites and policies enjoying increased investments from AV manufacturers and stakeholders. These jurisdictions will also likely be the first to experience the economic productivity gains AV vehicles can generate.


• Insurance companies incorporating AV coverage in their packages as the technology continues to develop. However, as the technology matures and safety statistics prove favorable, AV vehicle manufacturers may begin offering their own insurance services to profitably self-insure their vehicles. 


• Increased investments and research on making AV safer, particularly enhanced computer vision, cybersecurity, and advanced sensors.

Questions to comment on

• What are your community’s or city’s policies regarding AV testing, if any?


• How else do you think local governments can implement safe AV testing and deployment?