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 “connected” passenger vehicles made or owned by Chinese or Russian entities from operating in the US, even if the vehicles are manufactured on American soil. It goes into effect in 2027, killing any hopes that Chinese EV mega-brands like BYD could break into 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 go into effect for the 2030 model year.
The rule comes after a year of “rigorous factfinding,” 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 announcement lists examples of Chinese state-sponsored hacking and espionage campaigns.
Though the rule only applies to passenger vehicles, the government announced today that it is looking into a similar one for vehicles over 10,000 pounds. That will be up to the Trump administration to pursue. For now, it means BYD can continue assembling its electric buses in California, according to Reuters.
Original Story (9/23/24):
The Biden administration has proposed a ban on connected vehicle software made by China and Russia for the 2027 model year and a hardware ban starting with 2030 model year vehicles.
“These countries of concern could 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 connecting the vehicle to the outside world” through Bluetooth, cellular satellite, and Wi-Fi. It also includes autonomous driving systems. Such technologies collect data on drivers and passengers, as well as American infrastructure.
Although Russia is mentioned, Chinese automakers are the greater threat, as they are “seeking to dominate connected vehicle technologies in the United States and globally, posing new threats to our national security, including through our supply chains,” the White House says.
The ban has been in the works since February 2024, when President Biden had the Commerce Department investigate national security risks posed by connected vehicles from countries of concern. That included a public comment period, the results of which have been incorporated into today’s rulemaking proposal.
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The Commerce Department must now develop a final rule. It’s still taking input from stakeholders “to ensure any actions maximally protect US national security while minimizing unintended consequences or disruptions,” the White House says.
In May, the Biden administration hiked tariffs on Chinese electric vehicles from 25% to 100%, which caused 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 American 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.
On that front, the Biden administration last week released $3 billion in funding for domestic battery production. The funds will go toward 25 projects in 14 states, including $200 million for Washington-based Group14 to build a silicon battery materials factory.
Though China has developed an advanced auto industry with EVs that could drive down the prices for US consumers, national security concerns prevent them from flooding the market. Through these measures, the Biden administration wants to build up domestic capabilities to produce homegrown vehicles and software, but it’ll likely take years to come to fruition.
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About Emily Forlini
Senior Reporter
