SA is on its way to becoming the first Australian state to allow driverless cars, following the introduction of new legislation.

The Motor Vehicles (Trials of Automotive Technologies) Amendment Bill allows autonomous vehicles to be tested on public roads, exempting them from laws requiring cars be under full and active hands-on control at all times.

Transport and Infrastructure Minister Stephen Mullighan says the bill positions SA at the forefront of an industry estimated to be worth $90 billion over 15 years.

“We are on the cusp of the biggest advance in motoring since the Model T opened up car ownership to the masses,” he said. “As the first state in Australia to regulate a framework for such testing, we are opening our doors to global businesses to develop and trial their technologies here, while also creating the right environment for local businesses to grow and flourish.”

One such local business is Cohda, whose hardware and software is being used in more than 60% of all vehicle-to-infrastructure and vehicle-to-vehicle field trials.

“Cohda is currently working on software for General Motors’ connected vehicle, the Cadillac CTS, which is due for release next year,” Mr Mullighan said.

He says the new legislation requires car manufacturers to submit detailed plans to the Government for approval, and requires they have appropriate insurance in the case of an accident.

“It is critical that the public has confidence that these trials will operate safely on our roads,” Mr Mullighan said. 

Driverless cars are expected to dramatically change the motor insurance industry.

With human error accounting for 90% of collisions, many of the routine claims that drive the cost of motor insurance are expected to diminish or disappear over time.

Last year a Lloyd’s report predicted lower claims would most likely result in lower premiums and tighter profit margins, and argued that if cars do become “crashless” the motor insurance industry may become defunct.

A Rand Corporation report warns that “if crashes decline in frequency, an entire ‘crash economy’ of insurance companies, body shops and chiropractors will be disrupted”.

Global information company IHS predicts nearly all vehicles will be self-driving “some time after 2050”.