Last month, the Biden Administration moved to ban on the sale of connected and autonomous vehicles in the U.S. that are equipped with Chinese and Russian software and hardware.
The U.S. Department of Commerce officials said the prohibitions on the software would take effect for the 2027 model year and the prohibitions on hardware would take effect for the model year of 2030, or on Jan. 1, 2029, for units without a model year.
The start date is due to more Chinese parts on U.S. vehicles than software, and software can be changed much faster than physical parts. Replacing hardware also could require complex engineering and assembly line changes.
Raimondo Explanation
U.S. Secretary of Commerce Gina Raimondo said the move is needed in cars due to microphones, cameras, GPS tracking and Bluetooth technology could make Americans more vulnerable to bad actors and potentially expose personal information, from the home address of drivers, to where their children go to school.
Raimondo offered that in an extreme situation, a foreign adversary could shut down or take simultaneous control of multiple vehicles operating on U.S. roads, causing crashes and blocking roads.
“This is not about trade or economic advantage,” Raimondo said. “This is a strictly national security action. The good news is right now, we don’t have many Chinese or Russian cars on our road.”
Connected Car Concerns
Security concerns around the extensive software-driven functions in Chinese vehicles have arisen in Europe, where Chinese electric cars have rapidly gained market share.
Imported Chinese-owned vehicle brands had 7.6 percent of the market for electric vehicles in Europe in 2023, more than doubling from 2.9 percent in 2020, according to the European Automobile Manufacturers’ Association.
Vehicles are now “mobility platforms” that monitor driver and passenger behavior and track their surroundings and Biden Administration officials pointed that it is clear from terms of service contracts included with the technology that data from vehicles ends up in China.
Pro-Active Measure
The move is pro-active as sales of Chinese or Russian cars do not have a foothold in the market yet.
Commerce officials sated China hopes to enter the U.S. market and several Chinese companies have already announced plans to enter the automotive software space. As for Russia, they are trying to “breathe new life into its auto industry.”
“We’re issuing a proposed rule to address these new national security threats before suppliers, automakers and car components linked to China or Russia become commonplace and widespread in the U.S. automotive sector,” Raimondo said.
