The U.S. Department of Commerce granted Volvo Cars a specific authorization to continue importing and selling vehicles that include Chinese-connected car technology, exempting the automaker from recent U.S. restrictions. The approval allows Volvo to proceed with its U.S. expansion plans and follow-through on models already slated for production at its South Carolina factory.
Scope Of The Authorization
The authorization applies to Volvo vehicles equipped with software and hardware developed or maintained by Chinese firms that would otherwise fall under rules finalized in January 2025. Those rules bar vehicles with such Chinese-connected technology starting with 2027 model-year vehicles for software and 2030 model-year vehicles for connected hardware.
Reasoning And Discussions
Volvo said the clearance followed “constructive discussions” with the Commerce Department and other U.S. officials that examined the company’s governance, technology, and data-security practices. The company is majority owned by China’s Geely Holding but noted most Volvo cars sold in the U.S. are manufactured in Sweden, with the EX90 assembled in South Carolina.
Production Plans In The U.S.
Volvo previously announced plans to produce the XC60 midsize SUV and a new hybrid at its South Carolina plant, and in March said it will move all production of the Polestar 3 to that factory. The Commerce clearance removes a regulatory obstacle that could have blocked those vehicles from the U.S. market due to Volvo’s ties and operations in China.
Regulatory Background
The rule, titled “Securing the Information and Communications Technology and Services Supply Chain: Connected Vehicles,” focuses on national security risks from vehicles using automated-driving systems developed by companies with Chinese ties. Under the rule, Chinese firms would also face prohibitions on testing autonomous vehicles in the United States.
Enforcement Questions
Some Chinese-linked AV firms currently test in U.S. states under permits; companies named in reporting include Baidu’s Apollo Autonomous Driving LLC, Pony.ai, and WeRide. It remains unclear whether state permits or federal measures tied to the Commerce rule will affect those test programs; TechCrunch said it has contacted California’s DMV to ask whether existing permits could be revoked.
Featured image credits: Wikimedia Commons
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