Biden Administration Proposes Ban Of Chinese, Russian Car Parts

The Biden administration is proposing a rule to block the sale and import of Chinese- and Russian-made hardware and software for connected vehicles, potentially bolstering US security against a hacking threat that the Commerce Department describes as “very real.”

The proposed ban aims to secure vehicles which can communicate externally through Wi-Fi, Bluetooth, cellular or satellite systems, a feature that’s increasingly commonplace with new vehicles. Officials said these systems are at risk for foreign interference, which could lead to disruption and sabotage. 

“This is not about trade or economic advantage. This is a strictly national security action,” US Commerce Secretary Gina Raimondo said in a call to reporters. “We are focused on the national security threat, very real threat, that connected vehicles pose to our country and the American people.”

US and European officials allege that that the Chinese government and local automakers are unfairly subsidizing the industry, saying that it could lead to a flood of cheap imports that distort the market. That’s prompted both the US and EU to raise tariffs on Chinese electric vehicles. China has denied its systems pose a security threat and has said the tariffs are an attempt to stifle competition.

Connected vehicles are specifically a threat because they’re deeply embedded in US infrastructure, National Security Adviser Jake Sullivan said, including charging stations, storage systems and power generation.

“Cars today have cameras, microphones, GPS tracking and other technologies connected to the internet. It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of US citizens,” Raimondo said in a statement.

Bloomberg reported on Saturday that the Biden administration planned to put the rule in place. The plan was first reported by Reuters.

The proposal comes as a result of an investigation into whether Chinese-made vehicles threatened national security. The Commerce Department started the probe in February, citing the large influx of personal data that cars take in through their sensors and cameras.

A software ban would go into effect for vehicles modeled in 2027, while the hardware rule would take effect for vehicles modeled in 2030. Units without a model year would be under the rule starting Jan. 1, 2029.

Senior administration officials said this is because most US market vehicles don’t have any Chinese- or Russian-made software, making that aspect of the rule a largely preventative measure. It may take longer to pivot away from Chinese-made hardware, however.

It’s unclear how many vehicles currently have Chinese-made hardware or how the US auto industry’s supply chain will need to adapt to accommodate the potential rule.

Once a rule is proposed, the Commerce Department invites public comments for 30 days after publication.

Separately, the White House announced a series of commitments for small and medium-sized automakers on Monday, with a $9.1 million grant to launch an electric vehicle supply chain transition program in Michigan.

As part of the US actions, Monroe Capital committed to raise up to $1 billion for small automakers to grow and diversify their business.