- Final rules prohibit Chinese or Russian-made software and hardware
- Legislation prevents Chinese companies from testing autonomous vehicles
- The measures will be phased in, starting with model year 2027 vehicles
With an impending departure from the White House on the 20th of this month, the Biden administration has made one of its final decisions that looks set to have a massive impact on electric car sales in North America.
Last September, the US Commerce Department proposed a blanket ban on the sale of connected hardware and software in the automotive industry, as well as other forms of consumer technology, such as drones, citing a threat to national security.
This week, the administration is finalizing rules that would effectively ban the sale of both Chinese- and Russian-made trucks and cars in the United States, as it looks to protect national security interests and fend off the threat of cheaper Chinese models affecting domestic automakers.
Commerce Minister Gina Raimondo said in an interview with Pakinomist: “It’s really important because we don’t want to have two million Chinese cars on the road and then realize … we have a threat.”
Basically, the ban covers any piece of software or hardware originating in China (or Russia) that connects a modern vehicle to the wider world, including GPS used by satellite navigation systems, Wi-Fi, Bluetooth, satellite and components for cellular data connections.
Add this to the heavy weight of camera and sensor technology, both inside the vehicle and outside, as well as microphones for voice-activated software, and Commerce Secretary Gina Raimondo believes any “foreign adversary” with access to the data collected by the components could “poses a serious risk to both our national security and the privacy of American citizens,” according to a report published by the Bureau of Industry and Security.
The decision will have a massive impact on the deployment of electric vehicles in North America, as it will affect any manufacturer that relies on Chinese suppliers for any of the aforementioned software and hardware, with some brands potentially disappearing from sales entirely.
Volkswagen, GM, Toyota and Ford all warned that the complexity of the global auto supply chain would lead to delays and disruptions as those brands sought to find new parts suppliers to comply with the proposed rules.
Polestar, which is owned by Chinese company Geely, argued that the ban could effectively put it out of business as it would deny it access to the US market, despite building a large proportion of its cars in Ridgeville, South Carolina, according to an article by Kelly Blue Book last October.
The legislation will also slow the development of self-driving vehicles and ride-hailing services, banning Chinese firms from testing on American roads, but also force some of the biggest names in the driverless game to rethink the hardware and software used in their vehicles.
Waymo, for example, plans to introduce models produced by the Geely-owned Zeekr brand for its latest robot taxi as it moves from the Jaguar I-Pace used in many of its tests to the more spacious Zeekr M MPV with improved battery range.
Analysis: Kiss the competition goodbye
While it’s hard to argue against the potential national security threat, it’s also hard to ignore the fact that so much connected consumer technology in use in North America comes from China—so why come down so hard on the auto industry?
One theory is that the next generation of highly autonomous and connected vehicles will harvest such a weight of data, from personal driver details to location and live video feeds, that your robot vacuum will pale into insignificance when it comes to its spying capabilities.
But it still seems like a harsh judgment on the growing number of respectable Chinese brands now producing highly competitive EVs, as well as the average American consumer, who now faces a more limited and potentially poorer choice of future vehicle.
Those companies that comply with the new rules will also find they have carte blanche to set prices, rather than being forced to compete with the cheaper competition. As a result, electric motoring could become much more expensive in the United States.
The software ruling is set to apply to 2027 model year vehicles, while rules on hardware are set to be imposed by 2029, giving the auto industry little time to apply for exemptions or extensions to the legislation.
Tesla CEO Elon Musk hit out at Biden’s plans late last year, saying they would create “unnecessary regulatory burdens” on Western automakers, many of which are already struggling to keep up with competition from China, according to The Telegraph .
Musk, one of Donald Trump’s biggest financial backers, now has close ties to the president-elect, meaning many of Biden’s recent decisions could potentially be reversed or tweaked anyway.
This is important as Tesla both manufactures in China and uses Chinese-derived technology in many of its vehicles.
