Chinese EV makers face a new challenge in seeking customers in the US: a new House bill that would limit or ban the import of their connected vehicles.
The bill, introduced by US Rep. Elissa Slotkin, comes as the The trade war between the US and China is intensifying in the wake of the Biden administration’s decision to quadruple import duties in Chinese electric vehicles at 100%.
Chinese EV makers have yet to make significant inroads into the US like they did in Europe. The aim of the bill appears to be to restrict manufacturers before they can flood the US market with smart, cheap cars.
Slotkin, a former CIA analyst and Pentagon official, has repeatedly warned Congress about the threat posed by Chinese-made connected vehicles. Earlier this month in one speech on the floor of ParliamentSlotkin described how the Chinese government has heavily subsidized its automaker to sell advanced, low-cost EVs equipped with sensors like lidar, radar and cameras that can collect and transmit data to Chinese authorities.
“If allowed into our markets, Chinese connected vehicles offer the Chinese government a treasure trove of valuable information about the United States, including the ability to gather intelligence on our military bases, critical infrastructure such as the power grid and traffic systems, and even track specific U.S. leaders must choose that,” Slotkin said in a statement released Wednesday. “China has a rapidly growing share of the connected car market in Europe and Mexico, so now is the time to make sure our defenses are strengthened before these vehicles enter the U.S. market.”
Last week, provisions championed by Slotkin — such as a ban on Chinese connected vehicles on US military bases and a ban on the Defense Department’s procurement of Chinese-made lidar — entered the The US government’s annual defense spending bill.
Slotkin’s bill, called the National Connected Vehicle Safety Review Act, if passed into law, would review not only EVs but autonomous vehicles as well. Some AV companies with ties to China, such as WeRide and Pony.ai, have active licenses for testing in California. Alphabet’s Waymo also has a deal with Chinese startup Zeekr to produce custom-designed robotics.
Waymo did not respond to TechCrunch’s request for comment on this bill.
How this bill will affect Chinese EVs
In terms of electric vehicles, Volvo and Polestar have a presence in the United States, both owned by China’s Geely Automotive. The majority of Volvo vehicles are assembled in Sweden, and the next generation of Volvo vehicles for the North American market will be built at a recently opened plant in Ridgeville, South Carolina.
A Polestar spokesperson assured TechCrunch that it does not share personal data from North American and European customers with China, and that as the automaker is based in Sweden, it is required to comply with GDPR laws.
Regardless, this bill will not exempt cars manufactured in friendly nations or domestically. If passed, the bill would give the Commerce Department the power to review any sale, import or other transaction involving a connected vehicle “designed, manufactured or supplied” by any company at all connected to China or a country of concern.
The bill takes traditional trade-restricting tools like tariffs a step further, potentially banning US-bound connected vehicles made by Chinese companies in countries like Mexico. That could appeal to automakers like BYD, whose chief executive Stella Li said in February that the automaker was shopping for a factory in Mexico.
The bill would also give clear legal authority to the Commerce Department and other federal agencies to strengthen national security protections and prevent future administrations from rolling back those protections, a move Slotkin said is not hypothetical.
Slotkin pointed to then-President Donald Trump’s order that would have given the US the power to address security risks from social media platform TikTok, which is owned by Chinese company ByteDance. President Joe Biden signed a bill in April that would have banned TikTok unless ByteDance sold the app. Trump, who is running for re-election in November, has since backtracked on his previous position and even opposed the efforts to force a sale.
Heightened US concerns about China’s data prowess arise Beijing is relaxing the rules governing cross-border data flows. Tesla is reportedly trying take advantage of this get the go-ahead to send its own connected car data back to the US to train Tesla’s “full self-driving” algorithms.
Slotkin’s bill also comes as promised by the Commerce Department issue a decision to Chinese connected vehicles later this year, after the Biden administration launched an investigation in February into the national security risks of such vehicles.
Slotkin plans to introduce the bill after June 3, when Congress resumes after the Memorial Day recess.
This article has been updated to include comments from Polestar. Originally Posted at 8:55 am PT.
