NEW YORK — The Commerce Department said Monday it’s seeking a ban on selling connected and autonomous vehicles in the U.S. equipped with Chinese and Russian software and hardware to protect national security and U.S. drivers.
While minimal Chinese and Russian software is deployed in the U.S., the issue is more complicated for hardware. There are more Chinese parts on U.S. vehicles than software, and software can be changed much faster than physical parts.
Replacing hardware could also require complex engineering and assembly line changes. That’s why Commerce officials said the prohibitions on software would take effect for the 2027 model year, and the prohibitions on hardware would take effect for the 2030 model year, or Jan. 1, 2029, for units without a model year.
The measure announced Monday is proactive but critical, the agency said, given that all the bells and whistles in cars, such as microphones, cameras, GPS tracking and Bluetooth technology, could make Americans more vulnerable to bad actors and potentially expose personal information, from drivers’ home addresses to where their children go to school.
In extreme situations, a foreign adversary could shut down or take simultaneous control of multiple vehicles operating in the United States, causing crashes and blocking roads, U.S. Secretary of Commerce Gina Raimondo told reporters on a call Sunday.
“This is not about trade or economic advantage,” Raimondo said. “This is a strictly national security action. The good news is right now, we don’t have many Chinese or Russian cars on our road.”
But Raimondo said Europe and other regions in the world where Chinese vehicles have become commonplace very quickly should serve as “a cautionary tale” for the U.S.
Security concerns have arisen in Europe, where Chinese electric cars have rapidly gained market share around the extensive software-driven functions in Chinese vehicles.
According to the European Automobile Manufacturers’ Association, imported Chinese-owned vehicle brands had 7.6% of the market for electric vehicles in Europe in 2023, more than doubling from 2.9% in 2020. The share of all-electric vehicles imported from China is still higher when Western-owned brands manufactured in China, such as BMW and Tesla, are included: some 21.7%.
“Who controls these data flows and software updates is a far from trivial question, the answers to which encroach on matters of national security, cybersecurity, and individual privacy,” Janka Oertel, director of the Asia program at the European Council on Foreign Relations, wrote on the council’s website.
Vehicles are now “mobility platforms” that monitor driver and passenger behavior and track their surroundings.
A senior administration official said that the terms of service contracts included with the technology clearly state that vehicle data ends up in China.
Raimondo said the U.S. won’t wait until its roads are populated with Chinese or Russian cars.
“We’re issuing a proposed rule to address these new national security threats before suppliers, automakers, and car components linked to China or Russia become commonplace and widespread in the U.S. automotive sector,” Raimondo said.
A senior administration official said it is difficult to know when China could reach that saturation level, but the Commerce Department says China hopes to enter the U.S. market, and several Chinese companies have already announced plans to enter the automotive software space.
Senior administration officials said on the call that the Commerce Department added Russia to the regulations because the country is trying to “breathe new life into its auto industry. “
The proposed rule would prohibit importing and selling vehicles with Russia- and China-manufactured software and hardware that allow the car to communicate externally through Bluetooth, cellular, satellite or Wi-Fi modules. It would also prohibit the sale or import of software components made in Russia or the People’s Republic of China that collectively allow a highly autonomous vehicle to operate without a driver behind the wheel. The ban would include vehicles made in the U.S. using Chinese and Russian technology. The proposed rule would apply to all vehicles, excluding those not used on public roads, such as agricultural or mining vehicles.
U.S. automakers said they share the government’s national security goal, but little connected vehicle hardware or software is coming to the U.S. supply chain from China.
Yet the Alliance for Automotive Innovation, a large industry group, said the new rules will make some automakers scramble for new parts suppliers. “You can’t just flip a switch and change the world’s most complex supply chain overnight,” John Bozzella, the alliance’s CEO, said in a statement.
