The Biden administration has expressed substantial concerns regarding the data collection practices of Chinese firms concerning U.S. drivers and infrastructure, as well as the risks of foreign interference in internet-connected vehicles and navigation systems.
The proposed regulation would prohibit the importation and sale of vehicles from China that contain essential communications or automated driving system software or hardware, as indicated by the two sources, who requested anonymity due to the confidential nature of the decision.
This action represents a notable intensification of the United States' ongoing efforts to restrict Chinese vehicles, software, and components. Just last week, the Biden administration implemented significant tariff increases on Chinese imports, including a 100% tariff on electric vehicles, along with new hikes on EV batteries and critical minerals.
Commerce Secretary Gina Raimondo highlighted in May the considerable risks associated with the presence of Chinese software or hardware in connected vehicles in the U.S.
"You can imagine the most catastrophic outcome theoretically if you had a couple million cars on the road and the software were disabled," she said.
President Biden initiated an investigation in February to assess potential national security risks associated with connected-car technology in Chinese vehicle imports. The inquiry aims to determine whether these software and hardware components should be prohibited in all vehicles operating on U.S. roads.
"China's policies could flood our market with its vehicles, posing risks to our national security," Biden said earlier. "I’m not going to let that happen on my watch."
The Commerce Department intends to allow a 30-day public comment period prior to finalizing the regulations, according to sources. Most newer vehicles on U.S. roads are classified as "connected," equipped with onboard network technology that facilitates internet access and enables data sharing with both internal and external devices.
Additionally, the department is expected to propose that software prohibitions take effect with the 2027 model year, while hardware restrictions would be implemented in January 2029 or the 2030 model year.
These prohibitions would target vehicles featuring specific Bluetooth, satellite, and wireless capabilities, as well as highly autonomous vehicles capable of operating without a driver.
In November, a bipartisan group of U.S. lawmakers expressed concerns regarding Chinese automotive and technology firms gathering and managing sensitive data during the testing of autonomous vehicles in the U.S.
The restrictions would also apply to other foreign adversaries, including Russia, as indicated by the sources.
A trade association representing major automakers, such as General Motors, Toyota, Volkswagen, and Hyundai, cautioned that modifications to hardware and software would require significant time.
The manufacturers emphasized that their systems undergo rigorous pre-production engineering, testing, and validation, making it challenging to interchange systems or components from different suppliers.
The Commerce Department did not provide comments on Saturday. Reuters initially reported in early August on a plan that would effectively prevent Chinese automakers from testing autonomous vehicles on U.S. roads, noting that there are relatively few Chinese-made light-duty vehicles imported into the country.