Biden proposes banning Chinese vehicles, 'connected car' technology from US roads (updated)

US Automotive Manufacturing

23/09/2024 17:24

(Adds auto industry reaction, Chinese embassy reaction, more
details on ban)
    By David Shepardson
       WASHINGTON, Sept 23 (Reuters) - 
    The U.S. Commerce Department on Monday proposed prohibiting
key Chinese software and hardware in connected vehicles on
American roads due to national security concerns, a move that
would effectively bar Chinese cars and trucks from the U.S.
market.
    The planned regulation, first reported by Reuters, would
also force American and other major automakers in years ahead to
remove key Chinese software and hardware from vehicles in the
United States.
    President Joe Biden's administration has raised concerns
about data collection by connected Chinese vehicles on U.S.
drivers and infrastructure and potential foreign manipulation of
vehicles connected to the internet and navigation systems. In
February, the White House ordered an investigation.
    The proposed prohibitions would prevent testing of
self-driving cars on U.S. roads by Chinese automakers and extend
to vehicle software and hardware produced by Russia and could be
extended to other U.S. adversaries.
        The proposal would make software prohibitions effective
in the 2027 model year. The hardware ban would take effect in
the 2030 model year or January 2029.
  
        The Commerce Department is giving the public 30 days to
comment on the proposal and hopes to finalize it by Jan. 20. The
rules would cover all on-road vehicles but exclude agricultural
or mining vehicles not used on public roads, as well as drones
and trains.
  
    The move is a significant escalation in U.S. restrictions on
Chinese vehicles, software and components. This month, the Biden
administration locked in steep tariff hikes on Chinese imports,
including a 100% duty on electric vehicles and hikes on EV
batteries and key minerals.
    "When foreign adversaries build software to make a vehicle
that means it can be used for surveillance, can be remotely
controlled, which threatens the privacy and safety of Americans
on the road," Commerce Secretary Gina Raimondo said. "In an
extreme situation, a foreign adversary could shut down or take
control of all their vehicles operating in the United States all
at the same time causing crashes, blocking roads." 
    There are relatively few Chinese-made cars or light-duty
trucks imported into the U.S. Raimondo said the department is
acting "before suppliers, automakers and car components linked
to China or Russia become commonplace and widespread ... We're
not going to wait until our roads are filled with cars and the
risk is extremely significant."
    Nearly all newer cars and trucks are considered "connected"
with onboard network hardware for internet access, allowing
sharing of data with devices inside and outside the vehicle.
    The Commerce Department said the rule would amount to a ban
on all vehicles manufactured in China but would allow Chinese
automakers to seek "specific authorizations" for exemptions.
    "We anticipate at this point that any vehicle that is
manufactured in China and sold in the U.S. would fall within the
prohibitions," said Liz Cannon, who heads the Commerce
Department's information and communications technology office.
        She added the 
    regulation would force General Motors
      GM.N  and Ford Motor  F.N  to stop selling vehicles
imported from China in the U.S. 
  
        The U.S. has ample evidence of China prepositioning
malware in critical American infrastructure, White House
National Security Adviser Jake Sullivan told the briefing.
    "With potentially millions of vehicles on the road, each
with 10- to 15-year lifespans the risk of disruption and
sabotage increases dramatically," Sullivan said.
    Chinese Foreign Ministry Spokesperson Lin Jian said China
urges Washington "to respect market principles and provide
Chinese companies with an open, fair, transparent, and
non-discriminatory business environment. China will firmly
safeguard its legitimate rights and interests."
    The Alliance For Automotive Innovation, a group representing
major automakers including GM, Toyota  7203.T , Volkswagen
 VOWG_p.DE  and Hyundai  005380.KS , said some automakers may
need more time to comply.
        The group said there is "very little" connected vehicle
hardware or software "that enters the U.S. from China. But this
rule will require auto manufacturers in some cases to find
alternate suppliers."
  

 (Reporting by David Shepardson; Editing by Edwina Gibbs and
David Gregorio)
 ((David.Shepardson@thomsonreuters.com; 2028988324;))