The United States, citing security concerns, is now considering banning vehicles made in China and Russia.

Electric vehicles made in China could be banned in the U.S. by 2027 if a new regulation is passed. The U.S. Bureau of Industry and Security (BIS) has published a notice of proposed rulemaking that would ban the import and sale of vehicles and components made by manufacturers with a “sufficient nexus” to the People’s Republic of China or Russia.

The proposed regulations focus on specific hardware and software components of electric vehicles (EVs) and the potentially malicious use of information and data they require. A vehicle communications system (VCS) allows cars to communicate with each other via Bluetooth, cellular, satellite, or Wi-Fi, while an automated driving system (ADS) allows cars to drive without a driver. The ban would include any parts imported for use in American-made cars, as well as those built into vehicles from China and Russia.

If adopted without changes, the only vehicles that would be exempt would be those associated with agricultural or mining purposes. And while a senior Biden administration official says that “(Chinese) and Russian automakers do not currently play a significant role in the U.S. auto market,” they believe it is a necessary preemptive strike given the sophistication of today’s electric cars and their growing centrality.

The White House statement explains that “these technologies include computer systems that control vehicle movements and collect sensitive driver and passenger data, as well as cameras and sensors that enable automated driving systems and record detailed information about America’s infrastructure.”

“While connected vehicles bring many benefits, the data security and cybersecurity risks posed by software and hardware components originating from China and other countries of concern are equally clear,” said National Security Adviser Jake Sullivan.

Just this month, the United States increased tariffs on Chinese imports of electric vehicles to 100%. The move comes amid a surge in Chinese auto exports, which jumped more than 30% in the first six months of 2024, according to the Associated Press.

While the proposal is still subject to change, if adopted as is, the new software ban would apply to all 2027 model year vehicles, while the hardware rules would apply to the 2030 model year.

More privacy, fewer options

The new rules can be seen both as a way to protect American production of electric vehicles (and much more expensive vehicles) and as a way to protect the privacy and security of Americans.

Despite the high tariffs, cars like the Volvo EX30 are cheaper than a Tesla Model Y in some markets, and according to The Atlantic, the average price of an EV in China is about $18,000 less than in the U.S. Lei Xing, former editor-in-chief of China Auto Review, says, “If 100 percent tariffs on EVs made in China were a brick wall, the proposed ban on connected vehicles would be a death sentence for China EV Inc.”

That’s not to say these new rules aren’t without merit. With cameras, GPS tracking, microphones, and other technology in modern electric vehicles, “it doesn’t take much imagination to see how a foreign adversary with access to this information could pose a serious threat to both our national security and the privacy of U.S. citizens,” said Commerce Secretary Gina Raimondo.

However, Raimondo’s speculation that China is causing chaos by disabling “hundreds of thousands of Chinese connected vehicles” is unlikely to come true anytime soon, given the negligible role that Chinese and Russian automakers play in the U.S. According to Statista as of August 2024, Tesla accounts for 82.5% of the U.S. EV market, with U.S. Ford (3%) and Chevrolet (2.9%), South Korea’s Hyundai (2.2%), and Germany’s BMW (1.8%), Volkswagen (1.7%), and Mercedes-Benz (1.4%) leaving just 4.5% divided between Nissan, Kia, and other manufacturers.

Tesla Cybertruck

(Photo source: Tesla)

Of course, this isn’t the first legal tech conflict between China and America. Huawei and ZTE equipment were banned in 2022, and Bytedance is still fighting in court to forcibly delist TikTok.

While the potential for malicious use of American data is certainly something to watch out for, if this proposal becomes law, the impact on electric vehicle prices in the U.S. could be significant. So while this rule will provide citizens with protection from “countries of concern” using their data, they will also lose access to some of the cheapest electric vehicles in the world.