The US Department of Commerce (DoC) is intending to prohibit the import and sale of connected vehicles using technology from "countries of concern".
The DoC has issued a "notice of proposed rulemaking" (NPRM) which, if finalised as proposed, will protect America from national security risks associated with certain countries, with Russia and the People’s Republic of China (PRC) named specifically.
"Certain hardware and software in connected vehicles enable the capture of information about geographic areas or critical infrastructure, and present opportunities for malicious actors to disrupt the operations of infrastructure or the vehicles themselves," stated the DoC in a recent Fact Sheet. "Certain technologies used in connected vehicles from the PRC and Russia present particularly acute threats. These countries of concern could use critical technologies within our supply chains for surveillance and sabotage to undermine national security."
The DoC’s proposed rule covers the import of connected vehicles with automated driving systems (ADS), used in driverless vehicles, and vehicle connectivity systems (VCS), which includes Bluetooth, cellular, satellite, and Wi-Fi modules. Even imports of VCS hardware equipment are covered by the rule.
Not all producers of connected vehicles will be affected and the DoC is proposing that some in the sector, such as small producers of vehicles, receive exemptions "on an exceptional basis" in order to minimise disruption to the industry.
The prohibition won't come into effect across the board immediately e.g. software in vehicle models from 2027 onwards and hardware for Model Year 2030, or January 1, 2029 for units without a model year.
In an effort to lessen the possible threat posed by foreign vehicles and supply chains, the Biden-Harris Administration increased the tariff on Chinese electric vehicles from 25% to 100% in May this year. Along with this, eligibility for a $7,500 EV tax credit was tied to final assembly of the cars being in North America, while sourcing key battery minerals and components must also come from the US or its trade partners.
"These prior actions underscore the Administration’s commitment to ensuring that the American auto industry is leading in quality and innovation," stated the DoC. "US automakers have the opportunity to compete on a level playing field as they develop the next generation of automobiles."
