In a move that could significantly impact the automotive industry, the US Commerce Department has proposed banning key Chinese software and hardware in connected vehicles. This proposed ban, citing national security concerns, would effectively block nearly all Chinese cars from entering the US market.
The proposed regulation goes beyond simply banning Chinese vehicles. It would also require American and other major automakers to remove critical Chinese software and hardware from vehicles sold in the US over the coming years. This decision follows a White House investigation in February into potential security risks posed by Chinese vehicle imports.
The Commerce Department’s proposed ban extends to vehicle software and hardware produced by other US foreign adversaries, including Russia. Commerce Secretary Gina Raimondo highlighted the potential dangers, stating, “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.” She further warned that in an extreme situation, a foreign adversary could remotely take control of a large number of vehicles, potentially causing crashes and blocking roads.
This proposed ban is a significant escalation in the United States’ ongoing restrictions on Chinese vehicles, software, and components. Earlier this month, the Biden administration imposed steep tariff hikes on Chinese imports, including a 100% duty on electric vehicles and new hikes on EV batteries and key minerals.
While there are relatively few Chinese-made cars or light-duty trucks imported into the United States, the Commerce Department is acting preemptively. As Raimondo stated, “We’re not going to wait until our roads are filled with cars and the risk is extremely significant before we act.”
Nearly all newer cars and trucks are considered “connected” with onboard network hardware that allows internet access. This allows them to share data with devices both inside and outside the vehicle. A senior administration official confirmed the proposal would effectively ban all existing Chinese light-duty cars and trucks from the U.S. market, but added it would allow Chinese automakers to seek “specific authorizations” for exemptions.
The White House National Security Adviser Jake Sullivan further emphasized the potential risks, stating, “With potentially millions of vehicles on the road, each with 10- to 15-year lifespans the risk of disruption and sabotage increases dramatically.” Sullivan also pointed to evidence of China positioning malware in critical American infrastructure.
China has criticized the proposed ban, urging the US to “earnestly abide by market principles and international trade rules” and create a “level playing field for companies from all countries.” The Chinese Embassy in Washington has stated that China will “firmly defend its lawful rights and interests.”
The proposed ban calls for making software prohibitions effective in the 2027 model year while 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 January 20. The rules would apply to all on-road vehicles but exclude agricultural or mining vehicles not used on public roads.
The Alliance For Automotive Innovation, a group representing major automakers including General Motors, Toyota Volkswagen and Hyundai, has warned that changing hardware and software would take time. The group acknowledged that connected vehicle hardware and software are developed around the world, including China, but could not detail to what extent Chinese-made components are prevalent in U.S. models.
