In a bold and somewhat unexpected move, the U.S. House of Representatives unanimously passed legislation that would dramatically increase the number of self-driving cars allowed on U.S. streets. The "Safely Ensuring Lives Future Deployment and Research In Vehicle Evolution Act," or SELF DRIVE Act, would not only hasten the deployment of driverless vehicles, but would pre-empt state regulation from blocking them. 

The bill still awaits debate in the Senate, but it could represent the first nationwide law to regulate autonomous vehicles. The National Highway Transportation Safety Administration (NHTSA) currently grants exemptions from federal motor vehicle safety standards for up to 2,500 autos per company for those wishing to test self-driving cars. The law would initially increase the number of exemptions to 25,000 annually, rising to 100,000 per year over the next three years. 

Vehicle running self driving mode and a woman driver reading book.

Will Congress pass sweeping self-driving car legislation? Image source: Getty Images.

Broad support from Detroit and Silicon Valley

Companies that have been advancing autonomous vehicle technology have been vocal about the need for established regulation in the space and been involved in the efforts to build it.

A coalition of tech giants and automakers, which calls itself The Self Driving Coalition for Safer Streets, has been working with Congress to build regulation that doesn't hinder innovation. Backed by members like Ford Motor Company (F -0.41%), ride hailing services Lyft and Uber, Volvo Cars, and Alphabet Inc.'s (GOOGL 0.43%) (GOOG 0.31%) self-driving unit Waymo, the group aims "to enact autonomous vehicle legislation that enhances safety, creates new mobility opportunities, and facilitates innovation." The Alliance of Automobile Manufacturers, which represents General Motors Company (GM 0.80%), Ford, and others, said "this legislation helps address a variety of barriers that otherwise block the ability to safely test and deploy these vehicle technologies."

Other notable lobbyists and leaders in the space include Tesla, Inc. (TSLA -3.10%) and Apple Inc. (AAPL -0.41%)

The fate of the proposed legislation hinges on approval in the Senate, which is by no means a done deal. A bipartisan group of Senators has been drafting a similar bill that could be released within weeks. Lawmakers will still need to agree on the fate of self-driving commercial trucks, which is not included in the House measure.

An expansion on current regulations

While the number of self-driving cars on the roads will increase dramatically, companies will still be required to comply with existing regulations and provide information establishing the safety of their autonomous vehicles, which includes reporting crash data. The act also requires automakers to apprise regulators and the public regarding such issues as privacy and cybersecurity.

The legislation was sorely needed, as current regulations were enacted prior to the development of the technology and were insufficient to address the advances in autonomous driving in recent years. The regulation comes as numerous traditional automakers and tech companies have been aggressively pursuing self-driving technology.

A race against time

Estimates vary, but the stakes are high for companies on the cutting edge of driverless tech. The Boston Consulting Group estimates that more than 12 million fully autonomous and 18 million partially autonomous vehicles will be sold worldwide annually by 2035, and forecasts the market will grow from $42 billion in 2025 to $77 billion in 2035, and will represent 25% of the entire new car market. Lux Research values the market at $87 billion by 2030, though it doubts cars will have reached full autonomy. 

With that much at stake, tech giants and automakers alike cheered in unison at the legislation.