Written by Cláudio Afonso | LinkedIn | X
The U.S. Commerce Department on Monday unveiled a proposal to ban Chinese-made software and hardware in connected vehicles over concerns they pose a national security threat.
If enforced, the rule would sharply restrict Chinese automakers’ access to the U.S. market, as most current models are equipped with hardware and advanced software that allow manufacturers to remotely access vehicle systems.
This remote access is often used to release new and improved software versions, keeping the vehicle updated and enhancing the customer’s experience through new features, improved performance and normal bug fixes.
The U.S. administration has recently finalized steep tariff increases on Chinese imports, including a 100 per cent duty on electric vehicles with the new duties becoming effective later this week, on September 27.
The planned ban wouldn’t just affect Chinese automakers as it would also bar Chinese tech from autonomous vehicle testing and apply to other adversarial nations like Russia.
As of this writing, XPeng shares are down nearly 3 per cent, Nio has dropped 3.2 per cent, and Zeekr is trading 2 per cent lower. Li Auto is the only Chinese automaker seeing gains in early Monday trading, up by half per cent.
The proposal also pushes automakers, including U.S. and international brands, to strip Chinese tech out of their vehicles over the next few years, as reported by Reuters.
Earlier this year, the White House ordered a review of how internet-connected vehicles could be manipulated remotely.
A senior administration official told Reuters that the proposed rule would essentially block all current Chinese-made light-duty cars and trucks from being sold in the United States.
However, the official noted that Chinese automakers could still apply for “special authorizations” to seek exemptions.
President Joe Biden announced in May that tariffs on Chinese electric vehicles would increase from 25 percent to 100 percent to prevent subsidized Chinese products from overwhelming the U.S. market and hindering the development of the American green technology sector.
Written by Cláudio Afonso | LinkedIn | X
