US Considers Banning Chinese Software in Connected Cars

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Key Takeaways

  • The US Commerce Department is proposing a ban on some Chinese software and components in cars.
  • The rules would be put forward in August.
  • There's a concern China could misuse the software for its own ends.

The US Commerce Department will soon propose rules banning some Chinese software and components in connected cars, according to Reuters.

Due in August, the rules would bar China and other countries from supplying crucial elements for software management and data, export controls lead Alan Estevez said. He noted that cars often collect a significant amount of sensitive data, such as location info.

The proposal would come after Commerce Secretary Gina Raimondo signaled that her agency wanted to put forward rules this fall. She floated a worst-case scenario where a hostile country could disable software for “millions” of cars.

The potential move comes as the US and Europe are looking at steep tariffs on Chinese EVs. Officials are concerned China might flood markets with cheap cars that hurt local manufacturers. Marques like BYD, Nio, and Xiaomi have very little presence in the States, but the Biden White House hopes to discourage any growth by raising tariffs on August 1st.

China has maintained that its cars are popular due to their competitive features and technology.  It has also claimed that US EV subsidies unfairly restrict competition. However, the Chinese government has spent large sums subsidizing electric cars, having spent over $28 billion in subsidies and tax discounts between 2009 and 2022.

The approach won’t necessarily hurt popular manufacturers. Companies with Chinese owners, such as Geely-owned Volvo, still tend to use Android Automotive and other software platforms made outside of China. This would mainly affect the Chinese firms themselves.