US proposes ban on Chinese tech in connected vehicles

The U.S. Commerce Department is set to propose a ban on Chinese software and hardware in connected and autonomous vehicles on American roads. This proposal, expected to be announced on Monday, marks a substantial escalation in the ongoing restrictions on Chinese technology and automotive components in the United States.

The proposed regulation aims to prohibit the import and sale of vehicles from China that contain key communications or automated driving system software or hardware. This decision comes in response to mounting apprehensions about the potential collection of sensitive data on U.S. drivers and infrastructure by Chinese companies, as well as the possibility of foreign manipulation of internet-connected vehicles and navigation systems.

Commerce Secretary Gina Raimondo previously highlighted the gravity of these risks, stating, "You can imagine the most catastrophic outcome theoretically if you had a couple million cars on the road and the software were disabled." This sentiment echoes the broader concerns within the Biden administration regarding the implications of Chinese technology in critical U.S. infrastructure.

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The proposed ban is part of a wider strategy to safeguard U.S. national security interests in the rapidly evolving automotive sector. President Joe Biden had ordered an investigation in February to assess whether Chinese vehicle imports pose national security risks, particularly concerning connected-car technology. "China's policies could flood our market with its vehicles, posing risks to our national security," Biden warned. "I'm not going to let that happen on my watch."

According to sources familiar with the matter, the Commerce Department plans to allow a 30-day public comment period before finalising the rules. The prohibitions on software are expected to take effect in the 2027 model year, while the hardware ban would be implemented in January 2029 or the 2030 model year. These restrictions would encompass vehicles with certain Bluetooth, satellite, and wireless features, as well as highly autonomous vehicles capable of operating without a driver behind the wheel.

The scope of the ban extends beyond just Chinese technology, potentially including other foreign adversaries such as Russia. This comprehensive approach underscores the U.S. government's determination to secure the nation's automotive infrastructure against a range of perceived threats.

The proposed regulations have raised concerns among major automakers, including General Motors, Toyota Motor, Volkswagen, and Hyundai. A trade group representing these companies has warned that changing hardware and software would require significant time and resources, noting that their systems "undergo extensive pre-production engineering, testing, and validation processes and, in general, cannot be easily swapped with systems or components from a different supplier."

This move follows recent actions by the Biden administration to increase economic pressure on China, including the implementation of steep tariff hikes on Chinese imports. These tariffs include a 100% duty on electric vehicles and new increases on EV batteries and key minerals, further tightening restrictions on Chinese automotive products entering the U.S. market.

The proposed ban has garnered bipartisan support, with lawmakers from both parties expressing alarm about Chinese auto and tech companies collecting and handling sensitive data while testing autonomous vehicles in the United States. This consensus reflects a growing recognition of the potential risks associated with foreign technology in critical infrastructure.

While the ban would apply to all vehicles on U.S. roads, exceptions are expected for agriculture and mining vehicles. The rule aims to ensure the security of the supply chain for U.S.-connected vehicles, recognising that most modern cars are essentially "smartphones on wheels," linked to phones, navigation systems, critical infrastructure, and the companies that manufactured them.