EU Weighs Restrictions on Chinese Connected-Car Technology
Following the United States’ lead, the European Union is inching towards its own restrictions on Chinese technology used in connected cars. This move reflects growing concerns about potential risks related to spying, surveillance, and sabotage.
After the U.S. government announced plans to ban Chinese tech that links cars to the internet from American roads, European officials have voiced similar anxieties. EU digital czar Margrethe Vestager has described connected cars as “computers on wheels.”
Vestager noted that connected cars can record and transmit data. She mentioned that the EU is examining potential for misuse of such technology in regard to security issues.
European officials echo US concerns regarding Chinese connected-car technology.
The focus on Chinese car technology is another front in the ongoing rivalry between the U.S., China, and other regions for control of key technologies, including artificial intelligence, microchips, and 5G. Espionage, economic coercion, sabotage and supply chain disruptions are driving the rivalry.
Europe is already levying trade tariffs on electric vehicles from Beijing-subsidized automakers. The goal is to stop Chinese cars from flooding the EU market.
The U.S. Commerce Department’s announcement marks the most recent attempt by Washington to place roadblocks on Chinese vehicles. Initially, the focus has been on cyber-hacking threats.
Canada and the U.K. are also considering enacting bans or legislation to address security concerns. In July, U.S. officials met with a selection of European countries to discuss cybersecurity and data risks associated with connected cars.
European officials have been quietly working on measures to better understand and address the perceived risks of Chinese tech in cars. A draft “ICT supply-chain toolbox” is being finalized by cybersecurity officials in coming weeks. The document addresses electric-vehicle connectivity and renewables. This resembles Europe’s 5G Security Toolbox, which resulted in a series of EU countries banning, limiting, or phasing out the Chinese telco vendor Huawei.
These “toolboxes” are non-binding documents and depend heavily on the willingness of the national governments to turn them into restrictive measures.
The EU has already passed various laws and legislation. These include cybersecurity policies for critical sectors, such as transport, and rules on the management of data generated by connected devices.
Dutch EU lawmaker Bart Groothuis stated that action now “hinges on the political will” to launch an investigation. The U.S. has the option of acting on national security grounds, but Brussels must leave such decisions to European capitals.
Greta Peisch, the former general counsel with the Office of the United States Trade Representative, said, “The U.S. is taking more of a national security approach to it, and the EU doesn’t necessarily have that tool to deploy.” This was in response to comments about the U.S. using national security to levy a 100-percent tariff on Chinese EVs.
Another adjustment to Europe’s rules on cybersecurity in cars has already affected the region. The United Nations Economic Commission for Europe sets certain regulations for autonomous vehicles and in-car cybersecurity.
A regulation implemented in July limited the models available in the EU. Manufacturers must implement a cybersecurity management system to protect user data. This rule impacted Chinese car sales in August, according to car analyst Matthias Schmidt.
MG — acquired by Chinese automaker SAIC in 2007 — registered zero vehicles in July. According to Schmidt, a Norwegian automotive official confirmed that the UN’s latest cyber regulation caused this.
This rule also affected European carmakers. Volkswagen subsidiary Porsche pulled its Macan combustion-engine model from the bloc’s market. The EU is considering its own moves regarding Chinese tech in cars.
However, its industries have warned that the U.S. measures could cause significant issues for Europe’s powerful car sector. Under the proposed U.S. ban, European manufacturers could need to find new suppliers if they use targeted parts in their cars that are exported to the U.S.
Several brands import cars from their Chinese production hubs, like BMW’s Mini and iX3, meaning they might be hit by the rule.
Automakers are also hesitant to provoke Beijing, especially German brands that rely on the Chinese market for most of their revenue. The car lobby ACEA did not provide any comment on the anticipated impact.
European Commission spokesperson Thomas Regnier said the EU will “closely monitor” the U.S. proposal. He mentioned that the EU will monitor any “direct or indirect impact” it has. He added that Brussels will “intensify its exchanges” with Washington after a meeting in late July.
