According to sources cited by Bloomberg, the U.S. Department of Commerce is set to unveil proposed rules banning Chinese and Russian software and devices used in connected vehicles.
In recent months, the department has consulted industry experts to address security concerns raised by the new generation of smart cars. The proposed regulations will focus on prohibiting the use and testing of Chinese and Russian technologies in autonomous driving systems and vehicle communications.
While the ban primarily targets software, it will also encompass some hardware components. The Biden administration is particularly focused on preventing China or Russia from infiltrating vehicles or tracking cars through software developed by their domestic firms.
Security Concerns
Today, many cars—both gasoline and electric—are equipped with devices that connect them to the internet or cloud services, making them potential targets for cyberattacks. The new regulations will include protective measures, as most new vehicles are at least connected via infotainment systems. This could result in Chinese automakers being barred from selling vehicles in the U.S. if they use their own communication technologies.
Last May, the administration imposed a 100% tariff on Chinese electric vehicles, citing government support for the Chinese automotive industry and increasing exports due to surplus production capacity, while U.S. companies are ramping up battery-operated vehicles.
Upcoming Discussions
On Monday, Lael Brainard, director of the White House National Economic Council, is scheduled to speak in Detroit about the Biden administration’s efforts to bolster the American automotive industry.
China has emerged as a leader in electric vehicles and smart car components, partly due to extensive government subsidies. BYD has sold more electric vehicles than Tesla, highlighting the competitive landscape.
In the fourth quarter of last year, global automakers increasingly relied on Chinese suppliers for the technology needed in connected vehicles. China claims to respect the data privacy and security of its foreign customers and principles of fair competition.
Data Collection Restrictions
The Department of Commerce plans to implement these new restrictions to prevent Chinese companies from collecting data on American drivers, especially individuals, and transmitting it back to China. The measures will also limit Chinese suppliers from establishing a stronger foothold in the U.S., giving the American automotive industry time to develop its own supply chain for connected vehicles.
Reuters first reported details in early August on plans that would effectively ban Chinese automakers from testing self-driving vehicles on U.S. roads. Currently, relatively few light vehicles manufactured in China are supplied to the United States.
