- Finalized rules ban Chinese or Russian-made software and hardware
- Legislation prevents Chinese companies from testing autonomous vehicles
- The measures will be implemented gradually, starting with vehicles from the 2027 model year.
With an imminent departure from the White House on the 20th of this month, the Biden administration has made one of its final decisions, which appears to have a massive impact on electric vehicle sales in North America.
In September last year, the US Department of Commerce proposed a blanket ban on the sale of connected hardware and software in the automotive sector, 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 will effectively ban the sale of Chinese- and Russian-made trucks and cars in the United States, as it seeks to protect national security interests and head off the threat of cheaper Chinese models hitting automakers. national cars.
Commerce Secretary Gina Raimondo told PakGazette in an interview: “It’s really important because we don’t want two million Chinese cars on the roads and then realize… that we have a threat.”
Basically, the ban covers any piece of software or hardware derived from China (or Russia) that connects a modern vehicle to the rest of the world, including GPS used by satellite navigation systems, Wi-Fi, Bluetooth, satellite and components. for mobile data connections.
Add to this the weight of camera and sensor technology, both inside and outside the vehicle, as well as microphones for voice-activated software, and Commerce Secretary Gina Raimondo believes that any “foreign adversary” with access The data collected by the components could “pose 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 electric vehicle adoption in North America, as it will affect any manufacturer that relies on Chinese suppliers for any of the aforementioned software and hardware, and some brands could disappear from sale entirely.
Volkswagen, GM, Toyota and Ford warned that the complexity of the global automotive supply chain will cause delays and disruptions, as those brands sought new parts suppliers to comply with the proposed rules.
Polestar, owned by Chinese company Geely, claimed 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 in October of last year.
The legislation will also slow progress in the development of autonomous vehicles and transportation services, prohibiting Chinese companies from testing on American roads but also forcing some of the biggest names in the driverless game to rethink hardware and software. used in their vehicles.
Waymo, for example, plans to introduce models produced by the Geely-owned Zeekr brand for its latest robotaxi, as it transitions from the Jaguar I-Pace used in much of its testing to the more spacious and autonomous Zeekr M minivan. improved battery.
Analysis: Say goodbye to the competition
Although it is difficult to argue against the potential threat to national security, it is also difficult to ignore the fact that there is so much connected consumer technology in use in North America that comes from China; So why be so hard on the auto industry?
One theory is that the next generation of highly autonomous and connected vehicles will collect so much data, from personal driver details to location to live video feeds, that your robotic vacuum cleaner pales into insignificance when it comes to its spying capabilities. .
But it still seems like a tough call for the growing number of reputable Chinese brands now producing highly competitive electric vehicles, as well as for the average American consumer, who will now face a more limited and potentially worse choice of future vehicle.
Those companies that adhere to the new rules will also find that they have carte blanche to set prices, rather than being forced to compete with cheaper competition. As a result, electric motors could become much more expensive in the United States.
The software rule is intended to apply to vehicles from the 2027 model year, while the hardware rules will be imposed by 2029, leaving the auto industry some time to request waivers or extensions of the legislation.
Tesla CEO Elon Musk criticized Biden’s plans late last year, saying they would create “unnecessary regulatory burdens” for 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 most recent rulings could be reversed or adapted anyway.
This is important as Tesla manufactures in China and uses Chinese-derived technology in many of its vehicles.
