New House Bill Targets Chinese EV Makers and Their Connected Vehicles

Chinese electric vehicle (EV) manufacturers are facing a significant challenge in their bid to enter the U.S. market. A new bill introduced by U.S. Representative Elissa Slotkin aims to limit or even ban the introduction of their connected vehicles. This legislative move comes amid escalating tensions between the U.S. and China, further complicated by the Biden administration’s recent decision to increase import duties on Chinese electric vehicles from 25% to 100%.

Chinese EV manufacturers have yet to establish a strong presence in the U.S., unlike their successful penetration in Europe. The bill appears to be a preemptive measure to curb the influx of affordable, technologically advanced Chinese EVs into the American market. Slotkin, leveraging her background as a former CIA analyst and Pentagon official, has repeatedly highlighted the national security risks associated with Chinese-built connected vehicles. These vehicles, equipped with advanced sensors like lidar, radar, and cameras, have the potential to collect and transmit sensitive data back to Chinese authorities.

In a speech delivered on the House floor earlier this month, Slotkin emphasized the threats posed by Chinese connected vehicles. She stated, “If allowed into our markets, Chinese connected vehicles offer the Chinese government a treasure trove of valuable intelligence on the United States, including the potential to collect information on our military bases, critical infrastructure like the power grid and traffic systems, and even locate specific U.S. leaders should they so choose.”

• Ban on Chinese Connected Vehicles at U.S. Military Bases: This measure aims to prevent potential espionage activities within critical military installations.
• Prohibition on Procuring Chinese-Made Lidar: Ensuring that the Department of Defense does not source lidar technology from Chinese manufacturers.
• Review and Regulation of Connected Vehicles: The bill would empower the Department of Commerce to review any transaction involving a connected vehicle linked to China or countries of concern.

Several Chinese companies, including WeRide and Pony.ai, currently hold permits to test autonomous vehicles in California. Furthermore, Alphabet’s Waymo has a partnership with Chinese startup Zeekr to produce purpose-built robotaxis. The passage of Slotkin’s bill could severely impact these operations, raising uncertainties about the future of these collaborations.

Waymo has yet to comment on the proposed legislation. However, other affected companies are beginning to voice their concerns. For instance, Volvo and Polestar, both owned by China’s Geely Automotive, have reassured stakeholders that their operations comply with stringent data privacy regulations. A Polestar spokesperson stated, “We do not share personal data from North American and European customers with China, and as a company headquartered in Sweden, we adhere to GDPR laws.”

If enacted, the bill would not only affect vehicles manufactured in China but also those built in third countries by Chinese firms. This provision could impact manufacturers like BYD, which is considering establishing a plant in Mexico. The bill aims to take traditional trade-restriction tools like tariffs a step further by potentially banning connected vehicles manufactured by Chinese companies in countries like Mexico.

The bill would grant the Department of Commerce and other federal agencies clear legal authority to enforce these national security protections. This move is designed to prevent future administrations from reversing these measures, as highlighted by Slotkin’s reference to the ongoing debate over the social media platform TikTok, owned by Chinese company ByteDance.

The U.S.’s growing concerns about China’s data collection capabilities are intensified by Beijing’s recent relaxation of cross-border data flow regulations. Reports suggest that Tesla is attempting to leverage these relaxed rules to send connected car data back to the U.S. to enhance its “full self-driving” algorithms.

Slotkin’s bill comes as the Department of Commerce is poised to issue a ruling on Chinese connected vehicles later this year, following a probe launched by the Biden administration in February into the national security risks posed by these vehicles. Slotkin plans to introduce the bill after June 3, once Congress reconvenes following the Memorial Day recess.

The introduction of the Connected Vehicle National Security Review Act represents a significant legislative move to address the potential national security risks posed by Chinese connected vehicles. As the trade war between the U.S. and China intensifies, this bill underscores the broader geopolitical and economic tensions that continue to shape the global automotive industry. The outcome of this legislative effort will have far-reaching implications for Chinese EV manufacturers, American consumers, and the future of international trade relations.

• The new bill targets Chinese EV manufacturers by potentially banning their connected vehicles from entering the U.S. market.
• Slotkin highlights the national security risks posed by data-collecting connected vehicles.
• The bill includes specific provisions such as bans on Chinese connected vehicles at military bases and prohibitions on Chinese-made lidar.
• The legislation would impact not only vehicles built in China but also those manufactured by Chinese companies in third countries like Mexico.
• The bill aims to strengthen legal and regulatory frameworks to ensure national security protections are maintained.

With these developments, the landscape for Chinese EV manufacturers looking to enter the U.S. market is set to become increasingly challenging. As the situation unfolds, stakeholders will be closely monitoring the legislative process and its implications for the automotive industry and international trade.

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