The US Commerce Department plans to unveil proposed rules that would ban Chinese and Russian-made hardware. software for connected vehicles as early as Monday, people familiar with the matter said.
The Commerce Department has been meeting with industry experts in recent months to discuss the safety concerns posed by the next generation of smart cars. The move would include a ban on the use and testing of Chinese and Russian technology for automated driving systems and vehicle communications systems, the people said. While the ban largely focuses on software, the proposed rules would cover some hardware, they said.
Many of today’s cars — both gas and electric — are equipped with devices that connect them to the internet or cloud services, making them potential targets for hacking. The pending restrictions stem from an investigation into cybersecurity risks from Chinese vehicle software that President Joe Biden launched in March.
The Biden administration’s main concern is preventing China or Russia from hacking vehicles or tracking them by intercepting communications using software systems made by their domestic companies. The rule would also be protectionist because most new cars are connected at least through infotainment systems, so Chinese automakers could be barred from selling vehicles in the U.S. if they use their connected technology.
In May, the administration imposed a 100 percent tariff on Chinese electric vehicles, suggesting the government was subsidizing its auto industry and increasingly exporting excess capacity at a time when U.S. companies were building more battery-powered cars.
The Commerce Department declined to comment.
Lael Brainard, director of the White House National Economic Council, will speak Monday in Detroit about the Biden administration’s efforts to “strengthen the U.S. auto industry.”
China has emerged as a leader in electric vehicles and smart car components, thanks in part to widespread government subsidies and support. BYD Co. sold more electric vehicles than Tesla Inc. in the fourth quarter of last year, and global automakers are increasingly relying on Chinese suppliers for technology needed for connected vehicles. China, meanwhile, has said it respects the data privacy and security of its foreign customers and the principles of fair competition.
The new restrictions will be imposed by the Commerce Department to prevent Chinese companies from collecting data on U.S. drivers, especially individuals, and sending it back to China. The rules will also effectively prevent Chinese suppliers from establishing a larger foothold in the U.S., giving the American auto industry time to build its own supply chain for connected vehicles.
The Trade Proposal includes different phased implementation periods for different affected software and components, people familiar with the proposal said.
Officials aim to enact the final rule in January 2025, the source said, after a 30-day comment period on the proposal.
Reuters first reported the outline of the proposal earlier on Saturday.
In addition to driver assistance systems and autonomous vehicles, and software that tracks vehicles using satellite mapping and location, the rules would govern hardware for vehicle communications systems. That could include things like so-called V2X systems, which cars use to communicate with road infrastructure, other equipped vehicles and the cloud.