The outgoing Biden administration is reportedly set to finalize plans this week to ban Chinese software and hardware from new autonomous and connected vehicles sold in the United States. The proposed ban, slated to take effect in 2027 for software and 2029 for hardware, aims to address national security and data privacy concerns.
According to a report by Reuters, US Commerce Secretary Gina Raimondo confirmed the new rules would be finalized this week. The legislation, initially proposed in September 2024, would effectively prohibit the sale of new Chinese-built cars in the US market. It would also compel other automakers to source necessary software and hardware components from alternative suppliers in the years ahead.
“We wanted to hear from [the] industry. We had to get it right. We digested all of that comment and now we’re going to get this out,“ Raimondo told Reuters. “It’s really important because we don’t want two million Chinese cars on the road and then realize… we have a threat.”
In response to the proposed ban, a Chinese Commerce Ministry spokesperson told Reuters that the decision “has no factual basis, violates the principles of market economy and fair competition, and is a typical protectionist approach.”
A US automotive lobby, representing major manufacturers such as General Motors, Toyota, Hyundai, and Volkswagen, previously expressed a need for more time to comply with the regulations. While the lobby indicated that “very little” Chinese hardware or software currently makes its way into US-bound vehicles, the ban is expected to significantly affect General Motors, Ford, and Volvo, which manufacture some vehicles in China for the US market.
The proposed legislation follows the US government’s previous introduction of a 100 percent tariff on Chinese-built electric cars, along with a 50 percent levy on electric batteries and minerals, as well as steel and aluminum, originating from China.
Australia is also monitoring the situation. A Department of Home Affairs spokesperson confirmed that Australia “has been proactively engaging with the US government to understand the implications of any proposed regulations,” although the spokesperson did not confirm if the government is planning to introduce similar laws. Additionally, Privacy Commissioner Carly Kind of the Office of the Australian Information Commissioner (OAIC) has stated that current Australian privacy laws may not be equipped to manage the rapid expansion of connected cars and related security risks. “As new technologies create new opportunities for data to be created, used and shared, including to the disadvantage and harm of the Australian community, it is becoming clear that our current legal framework is not fit for the purpose,” Kind told Drive. “We are prioritising regulatory action that addresses activities that pose a significant potential for harm to individuals [which] includes practices that impact [an] individual’s choice and control through opaque terms and conditions of service,” Kind added.
