Biden administration to prepare ban on Chinese and Russian car software to ensure safety

Commerce has been meeting with industry experts in recent months to address safety concerns raised by the next generation of so-called smart cars. The move would include bans on the use and testing of Chinese and Russian technology in automated driving and vehicle communication systems, the people said. While the bans mainly apply to software, the proposed rules would also cover hardware, they said.

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Many of today’s cars — both gas and electric — are equipped with devices that connect them to the internet or cloud services, making them potential targets for hackers. The pending restrictions stem from an investigation into cybersecurity threats from Chinese car software that President Joe Biden launched in March.

A major concern for the Biden administration is preventing China or Russia from hacking vehicles or tracking cars by intercepting communications with software systems their domestic companies built. The rules would also have a protectionist element, since most new cars are connected at least through infotainment systems, so Chinese automakers could be barred from selling vehicles in the U.S. that use their connected technology.

In May, the administration imposed a 100 percent tariff on Chinese electric vehicles, saying the Chinese government was subsidizing the Chinese auto industry and increasingly exporting excess capacity at a time when American companies were producing more battery-powered cars.

The Commerce Department declined to comment.

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Lael Brainard, director of the White House National Economic Council, is scheduled to speak in Detroit on Monday about the Biden administration’s efforts to “strengthen the U.S. auto industry.”

China has emerged as a leader in electric vehicles and smart-car components, thanks in part to widespread government subsidies and support. BYD Co. sold more all-electric vehicles than Tesla Inc. in the fourth quarter of last year, and global automakers have become increasingly dependent on Chinese suppliers for the technology needed for connected vehicles. China, for its part, has said it respects the privacy and security of its overseas customers and the rules of fair competition.

The new restrictions will be enforced by the Commerce Department to prevent Chinese companies from collecting data on American drivers, especially individuals, and sending it back to China. The rules will also effectively prevent Chinese suppliers from gaining a larger foothold in the U.S., giving the U.S. auto industry time to build its own supply chain for connected vehicles.

The Commerce proposal calls for different implementation periods for different software and components, according to people familiar with the proposal.

Authorities plan to pass final regulations in January 2025, according to citizens, after a 30-day comment period on the proposals.

Reuters first reported an outline of the proposal on Saturday.

In addition to driver assistance systems and autonomous vehicles, as well as software that tracks vehicles using mapping and satellite location, the rules will apply to hardware for vehicle communication systems. This could include things like so-called V2X systems, which cars use to talk to road infrastructure, other equipped vehicles and the cloud.

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