UPDATE: The Biden administration has finalized a ban on smart car software and hardware made by Russia and the People’s Republic of China (PRC).
First proposed last fall, the rule prohibits “related” passenger vehicles manufactured or owned by Chinese or Russian entities from operating in the US, even if the vehicles were manufactured on US soil. It goes into effect in 2027, killing any hope that Chinese electric vehicle mega-brands like BYD could enter the US market.
Also in 2027, US car companies cannot buy or import any connected vehicle software, such as Wi-Fi, Bluetooth, cellular satellite and autonomous driving systems. Restrictions on hardware components take effect for the 2030 model year.
The rule comes after a year of “rigorous fact-finding,” the administration says. It aims to “defend against the PRC’s cyber espionage and intrusion operations, which continue to pose a significant threat to US critical infrastructure and public safety.” The notice lists examples of Chinese state-sponsored hacking and espionage campaigns.
Although the rule only applies to passenger vehicles, the government announced today that it is seeking one for vehicles over 10,000 pounds. That will be up to the Trump administration to follow through. For now, that means BYD can continue assembling its electric buses in California, according to Reuters.
Original story (9/23/24):
The Biden administration has proposed a software ban on connected vehicles made by China and Russia for the 2027 model year and a hardware ban starting with 2030 vehicles.
“These troubling countries can use critical technologies within our supply chains for surveillance and sabotage to undermine national security,” the White House says.
The proposal covers vehicle connectivity systems (VCS), or “systems and components that connect the vehicle to the outside world” via Bluetooth, cellular satellite and Wi-Fi. It also includes autonomous driving systems. Such technologies collect data on drivers and passengers as well as US infrastructure.
Although Russia is mentioned, Chinese automakers are the biggest threat, as they are “seeking to dominate connected vehicle technologies in the United States and globally, posing new threats to our national security, including our supply chains.” “, says the White House.
The ban has been in the works since February 2024, when President Biden asked the Commerce Department to investigate the national security risks posed by vehicles linked from countries of concern. This included a public comment period, the results of which are incorporated into today’s proposed rulemaking.
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The Commerce Department must now draft a final rule. It is still receiving input from interested parties “to ensure that any action will maximally protect US national security while minimizing unintended consequences or disruptions,” the White House says.
In May, the Biden administration raised tariffs on Chinese electric vehicles from 25% to 100%, prompting Chinese-owned Volvo to delay the US launch of the $35,000 EX30. Car & Driver reports. Combined with the $7,500 federal EV tax credit, the administration says its goal is to ensure U.S. automakers can compete globally. Ford, for example, cited its inability to keep up with Chinese automakers when it announced scaled-back EV plans last month.
In this regard, the Biden administration last week released $ 3 billion in funding for domestic battery production. The funds will go to 25 projects in 14 states, including $200 million for Washington-based Group14 to build a silicon battery materials factory.
Although China has developed an advanced auto industry with electric vehicles that could undercut prices for American consumers, national security concerns prevent them from flooding the market. Through these measures, the Biden administration wants to build domestic capabilities to produce domestically produced vehicles and software, but that will likely take years.
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About Emily Forlin
Senior reporter
