The U.S. Commerce Department has announced plans to prohibit the import or sale of connected vehicle technology from China and Russia, citing concerns that these foreign components could be used to collect data on Americans and hack vehicles. The proposed regulations, first reported by Reuters, would ban the import or use of software from the designated countries starting with 2027 model vehicles, while similar restrictions on hardware for connected vehicles would begin with model year 2030.
The Commerce Department’s Proposed Rules
The proposed rules specifically target autonomous driving systems and vehicle connectivity systems, which allow cars to connect to the internet or other networks via Wi-Fi, Bluetooth, cellular systems, or satellite. The White House stated that “certain hardware and software in connected vehicles enable the capture of information about geographic areas or critical infrastructure, and present opportunities for malicious actors to disrupt the operations of infrastructure or the vehicles themselves.”
Industry Reaction
The Alliance for Automotive Innovation, an industry group representing car manufacturers, noted that while connected cars in America contain “very little technology” from China, some automakers may struggle to meet the proposed timeline for phasing out these components. “You can’t just flip a switch and change the world’s most complex supply chain overnight,” said John Bozzella, CEO of the alliance.
This move is part of a broader effort by the Biden administration to curb China’s influence in the American auto market. In May, the administration announced it was raising the tariff rate from 25% to 100% on electric vehicles imported from China and increased tariffs on batteries and battery components used in electric vehicles from 7.5% to 25%.
Background
The decision comes as Chinese car companies have increasingly threatened America’s dominance in the industry. Last year, global sales by Chinese automakers exceeded those of U.S. manufacturers for the first time, with 13.4 million sales compared to 11.9 million sales, according to an analysis by Jato Dynamics.
