NHTSA to streamline exemption to allow OEMS to sell automated vehicles

Published on June 19, 2025

U.S. Department of Transportation recently announced that the National Highway Traffic Safety Administration (NHTSA) will streamline an exemption that allows OEMs to sell automated vehicles that do not fully comply with the Federal Motor Vehicle Safety Standard (FMVSS). 

The Part 555 exemption process allows manufacturers to sell up to 2,500 vehicles per year that don’t comply with the process, a news release says. It says this includes vehicles that do not have traditional steering wheels, driver-operated brakes, or rear-view mirrors. However, OEMs must still demonstrate their vehicles meet an equivalent safety level as compliant vehicles and that the exemption is in the public interest. 

“The Part 555 exemption process has been rightly criticized for taking years, bogging developers down in unnecessary red tape that makes it impossible to keep pace with the latest technologies,” U.S. Transportation Secretary Sean P. Duffy said in the release. “We’ve streamlined this process to remove another barrier to transportation innovation in the United States, ensure American AV companies can out-compete international rivals, and maintain safety.” 

The streamline involves improvements to NHTSA’s internal processes to expedite processing time, improve transparency, and increase engagement with applicants, the release says. Applicants will receive improved instructions to get a better idea of what to expect and ensure they provide necessary information upfront. 

“This next step in NHTSA’s AV Framework will advance innovation by supporting the commercial deployment of purpose-built automated vehicles that can satisfy safety requirements,” Peter Simshauser, NHTSA chief counsel, said. “The agency continues working to modernize the FMVSS for automated vehicles, and in the meantime, Part 555 exemptions will play an integral role in enabling the ongoing advancement of our domestic AV industry.” 

A letter sent to stakeholders noted that the current exemption process was designed for traditional vehicles. 

“As currently applied, this process is not well suited for processing exemptions involving ADS-equipped vehicles in a timely manner or overseeing the unique complexities involving their operations,” the letter says. 

It adds that ADS vehicles also evolve over time as the technology matures, and developing static terms and conditions for the entire lifespan of an exempted vehicle is often challenging and time-intensive. 

NHTSA has developed process improvements to mitigate these issues, the letter says. This includes applying more adaptable terms and conditions. 

The streamlining is part of Duffy’s innovation agenda

NHTSA announced in April a new autonomous vehicle regulation framework as part of the agenda.

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