BYD’s vehicles “have no place in the United States,” the chairman of the House Select Committee on the Chinese Communist Party said, after reports that the carmaker’s founder may accompany Xi Jinping to Washington next week.
BYD “is Pentagon-designated Chinese military company that has perpetrated human rights abuses and used slave labor,” John Moolenaar, a Michigan Republican, told Reuters.
“The CCP uses the company to advance industrial policies that will bankrupt automakers and ruin the manufacturing base of Western nations,” he said before citing data protection concerns.
“The company’s vehicles are rolling data collection devices that endanger Americans and have no place in the United States,” Moolenaar added.
Xi is due in Washington on September 24 for a state visit. Reuters reports that seven companies are under consideration for his business delegation, four of them in the auto or battery industry, including BYD and CATL.
Bloomberg reported on Wednesday that officials including Xi’s chief of staff Cai Qi were reviewing the list, while the South China Morning Post reported that Xiaomi executives were also being considered.
BYD has denied supporting China’s military and has threatened to challenge its designation.
Eight Months of Escalation
Moolenaar’s position has hardened through the year.
On January 15 he responded to reports that Ford was pursuing a partnership with BYD, warning that such a deal “would diminish Ford’s status as an iconic American company” and that “China has already shown in recent months that it will weaponize the auto supply chain.”
His conclusion then was commercial: “Ford should work with our nation’s allies, not our adversaries.”
On May 11 he and Debbie Dingell, a Michigan Democrat, introduced the House version of the Connected Vehicle Security Act, accusing Chinese companies including CATL and BYD of using “slave labor to undercut the fair wages of hardworking Americans.”
The Senate version, introduced on April 29 by Bernie Moreno and Elissa Slotkin, passed the Commerce Committee unanimously on July 22.
At a committee hearing earlier this week, he widened the target beyond BYD.
“Chinese automakers Geely and BYD are flooding roads around the world with subsidized connected vehicles that are rolling data collection devices for the CCP,” he said, in a statement that also accused Beijing of doubling down on industrial overcapacity “to capture a greater share of the global export market while bankrupting Western companies and deindustrializing the rest of the world.”
Slotkin drew a sharper inference this week. If Xi brings BYD to Washington, she said, “we can only assume there are deals afoot to allow Chinese cars to be imported, or Chinese companies are being invited to set up shop in the U.S.”
The Two Companies He Named
Geely and BYD sit at opposite ends of the European table, which is the only major market where both compete openly against the manufacturers Moolenaar is defending.
Geely Group, whose brands include Volvo Cars, Polestar, Lotus, Lynk & Co, Smart and Zeekr, registered 157,253 cars in the European Union in the first half, up 4.1% year on year, making it the largest Chinese-owned group in the bloc, according to the European Automobile Manufacturers’ Association.
BYD registered 130,743, up 168.2%, taking 2.2% of the market from 0.9% a year earlier and outselling Tesla, which registered 124,242. Chery Automobile grew 268.7% to 84,987, Leapmotor 526.7% to 48,261, and SAIC Motor, owner of MG, 19.1% to 127,585.
Together the five largest Chinese-owned groups accounted for about 9.3% of EU registrations in the half. Chinese brands have no meaningful share of the US market.
What the Bill Would Do
The Connected Vehicle Security Act would prohibit the import, manufacture, sale and resale of connected vehicles, software and hardware linked to China, Russia, Iran or North Korea. Vehicle and software prohibitions would take effect on January 1, 2027, hardware on January 1, 2030.
It codifies and extends the Commerce Department rule already restricting Chinese connectivity hardware and software in vehicles, which currently covers China and Russia only.
Its widest-reaching provision is an ownership test barring any automaker more than 15% owned by a Chinese company, which captures Volvo Cars and Polestar through Geely as well as BYD.
Volvo holds a Commerce authorisation that would preserve its US sales through 2031 unless revoked. Polestar has said it will not contest the ban.
General Motors, Stellantis, the Alliance for Automotive Innovation, the United Auto Workers, the American Iron and Steel Institute and the CAR Coalition have all backed the legislation. Slotkin has a second bill aimed at closing a route through Canada or Mexico.
Nio Is on the Same List
The Pentagon list Moolenaar invokes was updated on June 8, adding 65 entities and taking it to 188, an expansion of about 40% on the January 2025 version.
The additions included BYD and Nio, along with battery makers CALB and EVE Energy, Alibaba, Baidu, Unitree and TP-Link. Ten entities came off.
Moolenaar and Senator Rick Scott wrote to Securities and Exchange Commission Chairman Paul Atkins on July 16 asking the agency to require exchanges to append a warning flag to the tickers of designated companies within 30 days of designation.
The letter names Nio as the only carmaker among the designated companies listed on a US exchange, alongside Alibaba, Baidu and Hesai, and asks the commission to consider whether the same treatment should apply to BYD and Tencent, which trade over the counter through depositary receipts.
“These companies have no business trading on U.S. exchanges,” the two lawmakers wrote, urging the commission to use its existing authority to address their access to American capital. They requested a rulemaking within 60 days, a window that closed on Monday. The commission has not said publicly whether it will act.
The designation imposes no trading restrictions by itself. Its force comes from a Defense Department procurement ban effective June 30 and from the risk of a later addition to the Treasury’s Non-SDN Chinese Military-Industrial Complex list, which would prohibit Americans from buying or selling the securities.
The Administration Is Split
Transportation Secretary Sean Duffy wrote to Ford Chief Executive Officer Jim Farley on September 8 saying the company’s dealings with CATL, Geely and BYD raised “profound concern,” and urged Ford to cut ties, citing the Marshall, Michigan plant that runs on licensed CATL technology.
Trump told Fox News last week that he would be comfortable with Chinese car companies building vehicles in the United States.
Hyundai Chief Executive Officer Jose Munoz, asked on Friday what Washington should do, said conditions rather than exclusion. “I think we could expect similar things to happen in the US, at different levels, unless there are certain conditions,” he told Reuters, referring to the market disruption Chinese brands have caused in Europe.
