The U.S. Commerce Department is poised to announce a significant regulatory measure aimed at prohibiting Chinese software and hardware in connected and autonomous vehicles, citing national security concerns. This proposal is expected to be revealed on Monday, according to two sources familiar with the matter.
The Biden administration has expressed increasing alarm over the data collection practices of Chinese firms regarding U.S. drivers and infrastructure, as well as the potential risks of foreign manipulation of internet-connected vehicles. The proposed regulations would bar the import and sale of vehicles from China that contain essential communications or automated driving system software or hardware.
This move represents a notable escalation in the ongoing restrictions placed on Chinese vehicles, software, and components. Just last week, the administration finalized steep tariff increases on Chinese imports, which included a 100% duty on electric vehicles, alongside new tariffs on EV batteries and critical minerals.
Commerce Secretary Gina Raimondo previously highlighted the substantial risks posed by Chinese technology in connected U.S. vehicles, emphasizing the catastrophic potential if a large number of cars were to have their software disabled.
In February, President Biden ordered an investigation into the national security risks associated with Chinese vehicle imports, particularly concerning connected-car technology and whether such software and hardware should be banned entirely from U.S. roads.
The proposed regulations aim to make the software prohibitions effective by the 2027 model year, while the hardware ban would take effect by January 2029 or the 2030 model year. These prohibitions would encompass vehicles equipped with specific Bluetooth, satellite, and wireless features, as well as highly autonomous vehicles capable of operating without a driver.
Concerns about the collection and handling of sensitive data by Chinese automotive and tech companies testing autonomous vehicles in the U.S. have also been raised by a bipartisan group of lawmakers.
Additionally, the prohibitions would extend to other foreign adversaries of the U.S., including Russia. Trade groups representing major automakers such as General Motors, Toyota, Volkswagen, and Hyundai have cautioned that adapting to new hardware and software requirements could be a lengthy process, given the extensive pre-production engineering and testing involved in automotive systems.
The Commerce Department has refrained from commenting on the proposal. Reuters previously reported details of the initiative in early August, noting that there are currently few Chinese-made light-duty vehicles on U.S. roads. The forthcoming rule, which the White House has approved, aims to enhance the security of the supply chain for connected vehicles in the U.S. However, it will not apply to agricultural or mining vehicles.
President Biden has emphasized the interconnected nature of modern vehicles, likening them to “smartphones on wheels,” as they connect to phones, navigation systems, and critical infrastructure.
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