“An automotive revolution:” UK paves the way for self-driving electric cars by 2026

Self-driving electric vehicles could be on British roads as soon as 2026, after the Automated Vehicle’s Act became law this week in a move the government says could unlock the potential of a £42 billion industry.

In a statement, the UK government says the AV Act will put the country at the forefront of self-driving technology regulation, and potentially create 38,000 more skilled jobs by 2035.

The AV Law will require self-driving vehicles to achieve a level of safety at least as high as “careful and competent” human drivers, as well as meeting rigorous safety checks before being allowed onto roads. The UK government says the technology could drastically reduce future deaths and injuries from drink driving, speeding, tiredness and inattention.

“Britain stands at the threshold of an automotive revolution and this new law is a milestone moment for our self-driving industry, which has the potential to change the way we travel forever,” said UK Transport Secretary, Mark Harper.

“While this doesn’t take away people’s ability to choose to drive themselves, our landmark legislation means self-driving vehicles can be rolled out on British roads as soon as 2026, in a real boost to both safety and our economy.”

The UK’s AV act follows a number of trials across the country with British based Wayve ad Oxa trialing self-driving cars in London and Oxford. Earlier this month Wayve secured more than $1 billion in investment to develop its self-driving AI technology.

According to the government, the UK’s self-driving vehicle sector received £475 million of direct investment and created 1,500 new jobs between 2018 and 2022.

“The most comprehensive legal framework of its kind”

The UK government says the AV Act is the most comprehensive legal framework of its kind in the world and sets out who is liable for autonomous vehicles.

The act states that while in self-driving mode, drivers will not be held responsible for how the vehicle drives. The act shifts liability to corporations such as insurance providers, software developers and automotive manufacturers, a world first according to the UK government.

In addition to the autonomous vehicle approval system, the AV Act lays out new investigative powers specifically for incidents involving self-driving vehicles.

“This will promote the same culture of learning and continuous improvement that has made our aviation industry one of the safest in the world,” the government says. “Companies will have ongoing obligations to keep their vehicles safe and ensure that they continue to drive in accordance with British laws.”

Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT) says the new laws mark a major milestone for the automotive industry.

“This is a watershed moment for UK automotive innovation and road safety in the UK,” he said. “Self-driving vehicles will revolutionise our society, and this new law will help turn ambition into reality, putting the UK alongside a handful of other global markets that already have their regulatory frameworks in place.”

Tesla in the box seat for self-driving revolution

With over a billion miles driven with Full Self Driving software engaged, Tesla has a significant lead over it’s competitors in the race to autonomous vehicles. The company has over 99% of the world’s real-world driving data, thanks to its 5 million vehicles, each with 8 cameras soaking up billions of frames of road data every day.

Much of this data is being fed into Tesla’s ground-breaking in-house built neural net training supercomputer Dojo. As the global Tesla fleet grows, the data grows exponentially as does the capability of Tesla’s Full Self-Driving (FSD) software.

With that in mind, some believe it is more accurate to view Tesla as an advanced AI software company that’s developing cutting edge self-driving software at an exponential rate, and just happens to also be the world’s most advanced vehicle manufacturer.

It’s believed Tesla made a significant breakthrough with it’s FSD software in April this year prompting Musk to announce August 8th as launch date of Tesla’s Robotaxi as well as all Tesla staff being instructed to provide full FSD demos during vehicle pickups.

In April the Tesla community was abuzz with Full Self Driving (FSD) Beta software testers raving about the latest FSD version 12.3.3 update, with drivers reporting zero interventions during long drives in complex city traffic.

With the shear amount of data showing that with the inclusion of autonomous software, vehicles are already statistically far safer than human drivers, the new legislation in the UK paves the way for the technology to go mainstream.

Elon Musk’s 2016 Master Plan Part Deux predicted self-driving legislation

In his Master Plan, Part Deux, which was published in July, 2016, Musk laid out the company’s long-term strategy regarding autonomy.

In Master Plan, Part Deux, Musk predicted that regulators would approve self-driving vehicles at around 6 billion miles (10 billion km).

“Even once the software is highly refined and far better than the average human driver, there will still be a significant time gap, varying widely by jurisdiction, before true self-driving is approved by regulators. We expect that worldwide regulatory approval will require something on the order of 6 billion miles (10 billion km).” wrote Musk in Master Plan Part Deux.

After passing 1 billion miles in April, it now appears that UK regulators are moving faster than Musk predicted although there’s a high likelihood that the 6 billion mile milestone will be reached before the law comes into effect in 2026.

Robotaxi transitions Tesla from a seller of vehicles to a seller of mobility

In 2019 Musk said Robotaxis could earn their owners $US30,000 ($A46,000) per year. In the US a Model 3 starts at $US42,990 before the government’s $7,500 purchase credits meaning once legislators catch up, a new Model 3 used as a Robotaxi could almost pay itself off in the first year.

Tesla’s 3rd generation platform is said to reduce cost per vehicle to below $US20,000 which would bring the payback period on a Robotaxi down to just 8 months.

Combine this with a million-mile battery and all of a sudden you have an asset that could generate around $US300,000 for its owner over ten years. This obviously means as a revenue generating asset, a Tesla Robotaxi is worth much more than than a new Model 3 sale price.

If a single Robotaxi costs Tesla ~$US20,000 to make but can earn $US300,000 over 10 years, why would Tesla sell them for less than $50,000?

Why would they sell them at all?

The much more likely scenario is that Tesla builds a massive fleet of Robotaxis to operate under the Tesla brand. Tesla has the capacity to make millions of them each year and with substantially  lower running costs than fossil powered privately owned cars, most people will opt for a Transport as a Service (TAAS) subscription rather than forking out tens of thousands of dollars for a privately owned vehicle that’s only used for an hour each day.

In theory a Robotaxi could do the human transporting work of at least 10 privately owned vehicles each day (probably a lot more).

With battery packs that last at least 1.5 million km (around 7 times the lifespan of a fossil car) electrified Robotaxis and the vast majority of people opting for TAAS over private vehicle ownership, we could be about to witness the beginning of a monumental disruption to the 70 million unit per annum fossil car industry.