As cars become increasingly computerized and their safety functions evolve rapidly, the number of complex safety-critical components deployed in advanced driver assistance systems or autonomous vehicles is rising dramatically with high-end models containing hundreds of embedded microcontrollers. These integrated circuits must adhere to stringent requirements for high quality and long-term reliability driven by functional safety standards. This requires test solutions that address challenges posed by automotive systems. This article presents a scan-based test scheme optimizing test time and area overhead during manufacturing and in-system test of automotive electronics. The proposed scheme deploys observation test points that capture the faulty effects in every shift cycle into separate observation scan chains. To reduce area overhead, the scheme enables the sharing of flip-flops among control points. It is also shown how test points enhance test coverage (TC) in the presence of cascaded clock gaters. Finally, processing challenges when fault simulating every scan shift cycle to determine TC are addressed. Experimental results obtained for contemporary automotive designs and reported herein show significant improvements in test quality over traditional solutions.