U.S. Strikes Back: How Biden Targets Chinese EV Market Influence

President Joe Biden has enacted sweeping measures to curb Chinese influence in the U.S. electric vehicle market, but challenges lie ahead.

At a Glance

The Biden administration proposed new rules banning the sale or import of connected vehicle software from “countries of concern,” specifically targeting China.
National security threats, including potential sabotage and surveillance, were cited as reasons for the ban.
The mandate covers essential vehicle components like Bluetooth, Wi-Fi, cellular, and satellite modules, as well as cameras, sensors, and onboard computers.
New tariffs impose a 100% duty on Chinese-made electric vehicles and hikes on batteries and key minerals.
The ban takes effect for software in the 2027 model year and hardware in 2030, significantly challenging self-driving technology companies.

Biden Administration Actions Against Chinese EV Influence

The Biden administration has introduced stringent measures to reduce Chinese-made electric vehicles’ (EVs) dominance in the U.S. market. As part of these measures, a 100% tariff has been imposed on Chinese-made EVs. Simultaneously, the Department of Commerce has mandated the elimination of Chinese and Russian software and hardware from internet-connected cars by 2027 and 2030, respectively.

The new rules target vehicle software from “countries of concern,” effectively eliminating all auto imports from China. These decisions come as a response to national security threats, including potential sabotage and surveillance, which have become a growing concern for U.S. officials.

US set to impose 100% tariff on Chinese electric vehicle imports https://t.co/Ixm1cBwF2A

— Financial Times (@FT) May 10, 2024

National Security Concerns

The White House justifies the ban due to risks of cyber threats and potential sabotage. The regulations cover various connected vehicle components, including Bluetooth, Wi-Fi, cellular and satellite modules, cameras, sensors, and onboard computers. In addition to software, the bans extend to hardware used to connect vehicles to external networks, aiming to fortify defenses against cyber threats.

“We’ve already seen ample evidence of [China] pre-positioning malware on critical infrastructure for the purpose of disruption and sabotage,” Jake Sullivan, the national security adviser, noted. “And with potentially millions of vehicles on the road, each with 10- to 15-year life spans, the risk of disruption and sabotage increases dramatically.”

U.S. Commerce Secretary Gina Raimondo emphasized that the ban focuses on national security, rather than trade or economic advantages. She highlighted the proactive nature of the move, given the relatively low number of Chinese-made cars currently on U.S. roads.

I’m calling for a complete ban on Chinese electric vehicles in America.

We cannot allow China to bring its government-backed cheating to the American auto industry. pic.twitter.com/cekCo5Rt1K

— Sherrod Brown (@SenSherrodBrown) April 11, 2024

Impact on American Automakers

American automakers and suppliers must now prepare to phase out Chinese-made software and hardware from their vehicles. This imposes a significant challenge, especially for self-driving technology firms such as Google-backed Waymo. The software ban takes effect for the 2027 model year, and the hardware ban will begin in 2030. Firms will need to seek alternative suppliers and components quickly to comply with the new regulations.

“We’ll secure our cars and we’ll secure the American people, including our children, from potential surveillance, remote access, and control, and protecting Americans from bad actors and trying to give every American peace of mind,” Raimondo said.

The tariffs and bans form part of ongoing trade restrictions on Chinese-made vehicles and components. The proposal aligns with federal EV tax credit provisions that exclude vehicles with Chinese-made battery components, reinforcing the administration’s stance on curbing Chinese influence in key technological sectors.