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U.S. Commerce Department Moves to Restrict Chinese Vehicle Technology Over Security Concerns

WASHINGTON (Reuters) – The U.S. Commerce Department has put forth a proposal to prohibit the use of critical Chinese software and hardware in connected vehicles operating within American borders, citing national security risks. The intended regulation would essentially prevent the majority of Chinese vehicles from entering the U.S. market.

According to initial reports, this regulation will also necessitate that American and other major automakers remove specific Chinese technologies from their vehicles within the next few years.

The Biden administration has expressed deep concerns regarding the ability of Chinese firms to gather data from U.S. drivers and infrastructure via connected vehicles. This includes apprehensions about potential foreign interference with internet-connected vehicles and navigation systems, which prompted a detailed examination ordered by the White House earlier this year.

Should this proposal be enacted, it would prohibit Chinese firms from testing self-driving vehicles on American roads, while also extending restrictions to vehicle technologies produced by other foreign adversaries, including Russia.

Commerce Secretary Gina Raimondo emphasized the risks during a recent briefing, stating, “When foreign adversaries create software for vehicles, it raises the possibility of surveillance and remote control capabilities that endanger the privacy and safety of Americans.” She further elaborated on the potential consequences, warning that adversaries could theoretically disable or commandeer all vehicles operating in the U.S. simultaneously, leading to chaotic situations such as traffic accidents and road blockages.

This development represents a significant advancement in the United States’ ongoing efforts to restrict Chinese technology within the automotive industry. Earlier in the month, the Biden administration solidified substantial tariff increases on various Chinese imports, including a 100% tariff on electric vehicles and added levies on EV components and essential minerals.

Currently, there is a limited number of Chinese-made vehicles or light-duty trucks entering the U.S. market. Nevertheless, Raimondo stressed the importance of acting preemptively before Chinese or Russian automotive components become deeply integrated into the U.S. automotive landscape. “We’re not waiting until the roads are filled with vehicles that present significant risks,” she stated.

Most newer cars and trucks are classified as connected, equipped with onboard technology that provides internet connectivity and facilitates data exchange with both internal and external devices. A high-ranking official in the administration confirmed that this proposal could effectively ban all existing Chinese light-duty vehicles in the U.S. but mentioned potential pathways for Chinese manufacturers to apply for specific exemptions.

White House National Security Adviser Jake Sullivan added that there are indicators of China positioning malware within crucial American infrastructure, which heightens the urgency surrounding vehicle connectivity. “With millions of vehicles on the roads, each typically lasting 10 to 15 years, the risk for disruption or sabotage increases exponentially,” he noted during the briefing.

In response to the suggested restrictions, the Chinese Embassy in Washington condemned the measures aimed at limiting vehicle exports as contrary to market principles and international trade regulations. They reiterated a commitment to protecting China’s legitimate rights and interests.

The proposal sets a timeline for software restrictions to take effect in the 2027 model year and hardware prohibitions to commence in either the 2030 model year or January 2029. The Commerce Department is currently soliciting public feedback on the proposal for a 30-day period, aiming to finalize the regulations by January 20. The rules would apply to all vehicles on public roads except for those used in agriculture or mining.

The Alliance For Automotive Innovation, which represents major automotive players such as General Motors, Toyota, Volkswagen, and Hyundai, expressed concerns that altering existing hardware and software could require significant lead time. The organization noted that automotive technologies are developed globally, including in China, but refrained from specifying the level of Chinese components present in U.S. vehicles.

Source
finance.yahoo.com