Autonomous vehicles (AVs) are getting popular because of their usage in a wide range of applications like delivery systems, self-driving taxis, and ambulances. AVs utilize the power of machine learning (ML) and deep learning (DL) algorithms to improve their self-driving learning experiences. The sudden surge in the number of AVs raises the need for distributed learning ecosystem to optimize their self-driving experiences at a rapid pace. Toward this goal, federated learning (FL) benefits, which can create a distributed learning environment for AVs. But, the traditional FL transfers the raw input data directly to a server, which leads to privacy concerns among the end-users. The concept of blockchain helps us to protect privacy, but it requires additional computational infrastructure. The extra infrastructure increases the operational cost for the company handling and maintaining the AVs. Motivated by this, in this paper, the authors introduced the concept of gradient encryption in FL, which preserves the users’ privacy without the additional computation requirements. The computational power present in the edge devices helps to fine-tune the local model and encrypt the input data to preserve privacy without any drop in performance. For performance evaluation, the authors have built a German traffic sign recognition system using a convolutional neural network (CNN) algorithm-based classification system and GeFL. The simulation process is carried out over a wide range of input parameters to analyze the performance at scale. Simulation results of GeFL outperform the conventional FL-based algorithms in terms of accuracy, i.e., 2% higher. Also, the amount of data transferred among the devices in the network is nearly three times less in GeFL compared to the traditional FL.