Biden proposes banning Chinese vehicles from US roads through software crackdown by Reuters

By David Shepardson

WASHINGTON (Reuters) – The U.S. Commerce Department proposed on Monday to ban Chinese software and hardware in connected vehicles on U.S. roads due to national security concerns – a move that would effectively bar nearly all Chinese cars from entering the U.S. market .

The planned regulation, first reported by Reuters, would also force American and other major automakers in the coming years to remove key Chinese software and hardware from vehicles in the United States.

The Biden administration has expressed serious concerns about Chinese companies collecting data on American drivers and infrastructure through connected vehicles, as well as potential foreign manipulation of internet-connected vehicles and navigation systems. The White House ordered an investigation into the potential dangers in February.

The bans would prevent testing of self-driving cars on U.S. roads by Chinese automakers and extend to vehicle software and hardware made by other foreign U.S. adversaries, including Russia.

“When foreign adversaries build software to make a vehicle that means it can be used for surveillance, it can be controlled remotely, that threatens the privacy and safety of Americans on the road,” Commerce Secretary Gina Raimondo said in – a briefing.

“In an extreme situation, a foreign adversary could shut down or take control of all its vehicles operating in the United States, all causing accidents, blocking roads.”

The move represents a significant escalation of existing US restrictions on Chinese vehicles, software and components. Earlier this month, the Biden administration blocked steep tariff hikes on Chinese imports, including a 100 percent tax on electric vehicles, as well as new increases on EV batteries and key minerals.

There are relatively few Chinese-made cars or light trucks imported into the United States. But Raimondo said the department is acting “before suppliers, automakers and auto parts linked to China or Russia become commonplace and pervasive in the U.S. auto sector… We’re not going to wait until our roads are filled with cars and the risk is extremely significant before acting.”

Almost all newer cars and trucks are considered “connected” with on-board networking hardware that enables access to the Internet, allowing them to share data with devices both inside and outside the vehicle.

A senior administration official confirmed that the proposal would effectively ban all existing Chinese cars and light trucks from the U.S. market, but added that it would allow Chinese automakers to seek “specific authorizations” for exemptions.

The United States has ample evidence that China is planting malware in critical American infrastructure, White House National Security Adviser Jake Sullivan told the same briefing.

“With potentially millions of vehicles on the road, each with a lifespan of 10 to 15 years, the risk of disruption and sabotage increases dramatically,” Sullivan said.

China’s embassy in Washington last month criticized planned actions to limit Chinese vehicle exports to the United States: “China urges the US to seriously adhere to market principles and international trade rules and create a level playing field for companies from all countries. China will firmly defend its legal rights and interests.”

The proposal calls for software bans to be 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 Jan. 20. The rules would apply to all 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 (NYSE: ), Toyota (NYSE: ), Volkswagen (ETR: ) and Hyundai (OTC: ), warned that changing hardware and software would take time.

The group noted that connected vehicle hardware and software are being developed around the world, including in China, but could not elaborate on the extent to which Chinese-made components are prevalent in U.S. models.