Biden Administration Proposes Ban on Chinese Software and Hardware in Vehicles

By David Shepardson

WASHINGTON (Reuters) – The U.S. Commerce Department is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles due to national security concerns.

Sources say the Biden administration is alarmed by the potential data collection by Chinese companies on U.S. drivers and infrastructure, as well as risks from foreign manipulation of internet-connected vehicles.

The new regulation would ban the import and sale of vehicles from China containing key communications or automated driving systems software or hardware.

This proposed action marks an escalation in the U.S.’s ongoing restrictions concerning Chinese vehicles and components. Recently, steep tariff hikes on Chinese imports were also imposed, including a 100% duty on electric vehicles and increases on related batteries and minerals.

Commerce Secretary Gina Raimondo highlighted the serious risks of having Chinese technology in U.S. vehicles and warned that it could lead to catastrophic outcomes if a significant number of cars were compromised.

In February, President Biden initiated an investigation to evaluate whether Chinese imports pose national security threats and emphasized that he would not allow such risks to unfold on his watch.

The Commerce Department plans to allow 30 days for public comments before finalizing the rules, which would target all newer connected vehicles that share data through onboard network hardware.

The proposed software prohibitions are expected to take effect in the 2027 model year, while hardware bans would start in January 2029 or the 2030 model year, affecting vehicles with certain wireless capabilities and autonomous features.

U.S. lawmakers have expressed concerns about Chinese companies handling sensitive data while testing autonomous vehicles in the U.S., and the proposed measures may also apply to other foreign adversaries like Russia.

A trade group of major automakers warned that changes to systems may require extensive time due to necessary engineering and testing processes.

Very few Chinese-made light-duty vehicles are currently imported into the United States. The White House has approved the final proposal aimed at securing the supply chain for connected vehicles, which will cover all vehicles except those used in agriculture or mining.

President Biden stated that most vehicles are now connected like smartphones, linking them to navigation systems and critical infrastructure.