Biden issues restriction on imported Chinese-linked automobiles
In the twilight of his presidency, Joe Biden is putting Chinese automakers through their paces. The White House has proposed a new set of regulations that will prohibit the sale of connected vehicles from manufacturers under Chinese or Russian control within the United States starting from 2027.
The focus is on the advanced electronics in these vehicles, including mobile communication and driver-assistance systems. The rationale behind these measures is that adversaries abroad could potentially gain access to sensitive data, posing a "significant threat."
This rule could spell trouble for Tesla's competitor, Polestar. Even though they build their cars in South Carolina, they fall under the Control of the Chinese Geely conglomerate and its founder, Li Shufu.
Meanwhile, Google's self-driving vehicle company, Waymo, has plans to utilize modified vehicles from the Chinese brand, Zeekr, for its next generation of vehicles. Waymo, however, has assured that they will install their own computers in the vehicles to mitigate any potential risks.
The U.S. auto market has previously been shielded from Chinese cars using 100% tariffs by former President Donald Trump. The cyberspace chief of Tesla, Elon Musk, had criticized these high tariffs as market-distorting at the time. Tesla, with its large plant in Shanghai, is heavily dependent on the Chinese market.
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The new regulations are due to concerns regarding national security and cybersecurity risks. Foreign adversaries manipulating connected vehicle technologies could access sensitive or personal data. This includes data collected by Wi-Fi, Bluetooth, cellular, and satellite components.
Moreover, involvement of foreign adversaries in connected vehicle supply chains poses a significant threat. Malicious actors could gain access to these systems, allowing them to extract sensitive data or remotely manipulate vehicles.
The American transportation system, vital for daily life and commerce, is at risk if foreign adversary-controlled supply chains are exposed. The new regulations aim to safeguard U.S. national security and protect Americans' privacy by keeping foreign adversary technologies out of the country's connected vehicle supply chains.
The ban will impact automakers that utilize Chinese or Russian technology in their vehicles. General Motors, Ford, and Volvo are among companies that will be impacted by the new ruling.
Supply chain disruptions are also a concern due to the ban on certain components like cameras, radar sensors, and connectivity modules from China and Russia. Automakers are struggling to meet new compliance deadlines and re-source these components.
China has voiced its opposition to the ban. It has alleged that it disrupts economic and commercial cooperation and violates the principle of market economy and fair competition. China has urged the U.S. to halt its actions.
The Commerce Department aims to create another rule addressing foreign adversary involvement in the supply chain of commercial connected vehicles, including trucks and buses, but the timeline is not specified.
This rule poses a challenge for Polestar, as they are under the control of the Chinese Geely conglomerate. The new regulations could potentially limit the sale of their connected vehicles in the United States starting from 2027 due to their Chinese origins.
Despite facing potential challenges, Waymo, Google's self-driving vehicle company, has plans to utilize modified vehicles from the Chinese brand, Zeekr, for its next generation of vehicles. They are mitigating potential risks by installing their own computers in the vehicles.
