Electric vehicle manufacturer Polestar has issued a stark warning that proposed Biden administration regulations aimed at restricting Chinese vehicle technology would effectively end its operations in the United States, including the sale of cars manufactured on American soil. The Swedish automaker's response, filed Monday with the Commerce Department, highlights the complex challenges facing global automotive companies with Chinese connections.

The proposed rule, designed to address national security concerns regarding Chinese connected vehicles on American roads, would have far-reaching implications beyond its intended scope, according to Polestar's formal comments. Despite being a Swedish automaker and a brand of Volvo Cars, Polestar's majority ownership by Chinese automotive giant Geely would subject it to these restrictions.

In its defence, Polestar emphasised its predominantly non-Chinese operational structure. The company highlighted that seven of its ten directors are from Europe or the United States, and its CEO is German. Furthermore, of its approximately 2,800 global employees, only 280 are based in China, underscoring the company's limited Chinese operational footprint.

"Commerce should consider whether a rule that effectively shuts down the operations of a lawfully organised U.S. company with substantial U.S. investments and so many personnel and key decision-making units in friendly nations and the United States is appropriately tailored to address the stated national security concerns," Polestar stated in its filing.

The implications of this proposed regulation extend beyond Polestar. According to media reports from May, four Chinese vehicle models are currently sold in the United States, including the Polestar 2 and Volvo's S90 sedans. The Commerce Department has already indicated that major American automakers General Motors and Ford Motor would need to cease importing vehicles from China under the proposed rule.

Ford Motor Company has also raised concerns about the broad interpretation of the regulation. In its own comments to the Commerce Department on Monday, Ford warned that the rule could be interpreted "to prohibit the sale of completed connected vehicles by U.S. automakers if those vehicles were assembled within the jurisdiction of a foreign adversary such as by a foreign affiliate of a domestic U.S. automaker."

The situation highlights the increasing complexity of global automotive supply chains and corporate structures in an era of growing geopolitical tensions. Polestar's case is particularly noteworthy as it demonstrates how companies with multinational operations and ownership structures could be caught in the crossfire of regulations aimed at specific countries.

The impact of the proposed rule would be particularly severe for Polestar's U.S. operations, affecting not only vehicles imported from China but also those manufactured at its South Carolina facility. This aspect of the regulation has raised questions about whether the rule's scope might be broader than necessary to achieve its national security objectives.

When approached for comment on these concerns, the Commerce Department declined to provide any statement, leaving questions about potential modifications to the proposed rule unanswered.

The automotive industry's response to this proposed regulation reflects broader concerns about the increasing intersection of national security considerations with international trade and technology transfer. As connected vehicles become more sophisticated and integral to transportation infrastructure, the balance between security concerns and international commerce becomes more challenging to maintain.

This regulatory challenge comes at a critical time for the electric vehicle industry, as manufacturers worldwide are expanding their production and sales capabilities to meet growing demand for sustainable transportation options. The proposed rule's impact on companies like Polestar could have significant implications for competition and consumer choice in the U.S. electric vehicle market.

Electric vehicle manufacturer Polestar has issued a stark warning that proposed Biden administration regulations aimed at restricting Chinese vehicle technology would effectively end its operations in the United States, including the sale of cars manufactured on American soil.

Electric vehicle manufacturer Polestar has issued a stark warning that proposed Biden administration regulations aimed at restricting Chinese vehicle technology would effectively end its operations in the United States, including the sale of cars manufactured on American soil. The Swedish automaker's response, filed Monday with the Commerce Department, highlights the complex challenges facing global automotive companies with Chinese connections. The proposed rule, designed to address national security concerns regarding Chinese connected vehicles on American roads, would have far-reaching implications beyond its intended scope, according to Polestar's formal comments. Despite being a Swedish automaker and a brand of Volvo Cars, Polestar's majority ownership by Chinese automotive giant Geely would subject it to these restrictions. In its defence, Polestar emphasised its predominantly non-Chinese operational structure. The company highlighted that seven of its ten directors are from Europe or the United States, and its CEO is German. Furthermore, of its approximately 2,800 global employees, only 280 are based in China, underscoring the company's limited Chinese operational footprint. "Commerce should consider whether a rule that effectively shuts down the operations of a lawfully organised U.S. company with substantial U.S. investments and so many personnel and key decision-making units in friendly nations and the United States is appropriately tailored to address the stated national security concerns," Polestar stated in its filing. The implications of this proposed regulation extend beyond Polestar. According to media reports from May, four Chinese vehicle models are currently sold in the United States, including the Polestar 2 and Volvo's S90 sedans. The Commerce Department has already indicated that major American automakers General Motors and Ford Motor would need to cease importing vehicles from China under the proposed rule. Ford Motor Company has also raised concerns about the broad interpretation of the regulation. In its own comments to the Commerce Department on Monday, Ford warned that the rule could be interpreted "to prohibit the sale of completed connected vehicles by U.S. automakers if those vehicles were assembled within the jurisdiction of a foreign adversary such as by a foreign affiliate of a domestic U.S. automaker." The situation highlights the increasing complexity of global automotive supply chains and corporate structures in an era of growing geopolitical tensions. Polestar's case is particularly noteworthy as it demonstrates how companies with multinational operations and ownership structures could be caught in the crossfire of regulations aimed at specific countries. The impact of the proposed rule would be particularly severe for Polestar's U.S. operations, affecting not only vehicles imported from China but also those manufactured at its South Carolina facility. This aspect of the regulation has raised questions about whether the rule's scope might be broader than necessary to achieve its national security objectives. When approached for comment on these concerns, the Commerce Department declined to provide any statement, leaving questions about potential modifications to the proposed rule unanswered. The automotive industry's response to this proposed regulation reflects broader concerns about the increasing intersection of national security considerations with international trade and technology transfer. As connected vehicles become more sophisticated and integral to transportation infrastructure, the balance between security concerns and international commerce becomes more challenging to maintain. This regulatory challenge comes at a critical time for the electric vehicle industry, as manufacturers worldwide are expanding their production and sales capabilities to meet growing demand for sustainable transportation options. The proposed rule's impact on companies like Polestar could have significant implications for competition and consumer choice in the U.S. electric vehicle market.

Polestar warns Biden administration's Chinese tech ban would force complete US market exit

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.

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. 
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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 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. 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.

US proposes ban on Chinese tech in connected vehicles

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Polestar warns Biden administration's Chinese tech ban would force complete US market exit

US proposes ban on Chinese tech in connected vehicles