The Alliance for Automotive Innovation urged Congress to permanently ban Chinese connected vehicles, hardware and software from the US market before the 119th Congress adjourns, escalating the auto industry’s push to seal off the country from Chinese automakers through legislation rather than executive action alone.
CEO John Bozzella addressed the two-page letter to Speaker Mike Johnson, Senate Majority Leader John Thune, House Minority Leader Hakeem Jeffries and Senate Minority Leader Chuck Schumer.
The group represents General Motors, Ford, Toyota, Volkswagen, Hyundai, Honda, Stellantis and other major automakers, along with battery manufacturers, semiconductor makers, technology companies and autonomous vehicle developers.
Chinese automakers are “dumping subsidized vehicles with connected software and hardware around the world,” Bozzella wrote.
According to the letter, China is capturing market share in Europe, Australia, Southeast Asia, Mexico and South America with vehicles capable of collecting, processing and transmitting sensitive data to the Chinese Communist Party.
As no Chinese passenger cars have entered the US market yet, Bozzella urged Congress to act before that changes.
Three Bills in Play
The letter cited three pieces of bipartisan legislation moving through Congress.
In July, the Senate Commerce Committee approved the Connected Vehicle Security Act of 2026 (S. 4429), which would ban the sale, import and manufacture of Chinese connected vehicles and related software and hardware inside the US.
Republican Bernie Moreno of Ohio and Democrat Elissa Slotkin of Michigan sponsored the measure. Representatives John Moolenaar and Debbie Dingell introduced a House companion bill (H.R. 8730) mirroring the Senate version.
Separately, the House Energy and Commerce Committee approved the Motor Vehicle Modernization Act (H.R. 7389; Sec. 301) in May.
The bill would prohibit foreign adversaries, including China, from manufacturing, introducing into interstate commerce or importing any motor vehicle into the US.
All three measures have bipartisan support and co-sponsors from both parties’ leadership teams, according to the Alliance’s letter.
The auto industry employs 11 million Americans across all 50 states and drives about $1.5 trillion into the economy annually, the Alliance said.
BYD, Chery, SAIC
Thursday’s letter follows a separate Alliance communication to the Senate Commerce Committee in July.
In the earlier letter, the group urged lawmakers to explicitly bar the Commerce Department from granting specific authorizations to Chinese automakers including BYD, Chery, SAIC Motor and others subsidized by the Chinese Communist Party, according to Reuters.
Bozzella framed the automakers’ challenge not as competition with Chinese companies but with China’s state-backed industrial policy — including state-owned enterprises, heavy subsidies and unfair trade practices.
Passing a ban would “send a clear and bipartisan message that China’s strategy to dominate global automotive manufacturing will be met with a national security policy response from the American government,” Bozzella wrote then.
Mercedes Ownership Hurdle
Senate Commerce Committee Chair Ted Cruz has flagged a problem with the legislation.
A provision in the Moreno-Slotkin bill would ban companies with more than 15% ownership by Chinese entities from selling vehicles in the US.
For example, Mercedes-Benz Group AG’s two largest individual shareholders are both Chinese.
BAIC, the state-owned automaker, holds 9.98%, while Li Shufu, founder of Geely Holding Group, controls 9.69% — a combined stake of 19.67%, well above the bill’s threshold.
Cruz said the bill required changes before becoming law.
Mercedes has argued no single shareholder holds more than 10% of its stock and that its major shareholders have no board representation or decision-making authority.
Under the bill’s framework, however, the relevant figure is the combined Chinese stake.
Polestar Precedent
The push to legislate comes after the Commerce Department’s Bureau of Industry and Security already began enforcing the Biden-era Connected Vehicle Rule through company-specific authorization decisions.
Polestar was barred from selling new vehicles in the US from the 2027 model year after Commerce declined to grant the Sweden-based, Geely-owned brand an authorization in June.
CEO Michael Lohscheller called the decision “pretty straightforward” and ruled out an appeal.
Volvo Cars, which shares the same ultimate owner in Geely Holding, won its authorization in May after demonstrating to US authorities that vehicle data did not flow to China.
The Moreno-Slotkin legislation would codify the Biden-era rule in statute, preventing a future administration from rolling back the restrictions unilaterally.
China Pushes Back
The Chinese embassy in Washington opposed the effort.
Beijing has abolished market access restrictions on foreign investment in manufacturing and “remains open to international car makers,” the embassy said.
Tesla, Buick, Toyota and Ford were cited as household names in China.
Chinese-built vehicles are blocked from the US by a combined tariff rate exceeding 110%, layered across Section 301 and Section 232 duties.
The Connected Vehicle Security Act would extend the restrictions beyond tariffs — banning connected vehicle software from 2027 and hardware from 2030, regardless of where a vehicle is assembled.
Congressional pressure to block Chinese automakers from the US market has been building on both sides of the aisle for months.
More than 70 House Democrats urged Trump in April not to lower barriers for Chinese vehicles, while a separate letter signed by 52 House Republicans pushed the same position.
