Chinese EV manufacturers face new challenges as they pursue U.S. customers. That is, a new House bill that would limit or ban the introduction of connected vehicles.
The bill, introduced by U.S. Representative Elissa Slotkin, comes amid an escalating trade war between the U.S. and China after the Biden administration decided to raise import tariffs on Chinese electric vehicles from four times to 100 percent.
Chinese EV manufacturers have not yet made a significant presence in the U.S. like they have in Europe. The bill's goal appears to be to curb manufacturers before they flood the U.S. market with smart, affordable cars.
Slotkin, a former CIA analyst and Pentagon official, has repeatedly warned Congress about the threat posed by Chinese-made connected vehicles. In a speech to the House of Representatives earlier this month, Slotkin described how the Chinese government has heavily subsidized the auto industry to sell high-end, low-cost EVs equipped with sensors such as LiDAR, radar and cameras that can collect and transmit data back. Chinese authorities.
“If China’s connected vehicles are allowed into our markets, the Chinese government could collect information about critical infrastructure such as military bases, power grids and transportation systems, and have the potential to locate specific locations, providing valuable information about the United States. report will be provided to the Chinese government. American leaders must make that choice,” Slotkin said in a statement released Wednesday. “China has a rapidly growing share of the connected vehicle market in Europe and Mexico, so now is the time to strengthen our defenses before these vehicles enter the U.S. market.”
Last week, provisions advocated by Slotkin, such as a ban on Chinese-made connected vehicles on U.S. military bases and a ban on the Pentagon's procurement of Chinese lidar, were included in the U.S. government's annual defense spending bill.
Slotkin's bill, called the Connected Vehicle National Security Review Act, if passed, would review not only electric vehicles but also autonomous vehicles. A number of AV companies with ties to China, such as WeRide and Pony.ai, have active permits to test in California. Alphabet's Waymo also signed a deal with Chinese startup Zeekr to produce purpose-built robotaxi.
Waymo did not respond to TechCrunch's request for comment on the bill.
How will this bill affect Chinese EVs?
When it comes to EVs, Volvo and Polestar have a presence in the U.S. and are both owned by China's Geely Automobile. Most Volvo vehicles are assembled in Sweden, and the next generation of Volvo vehicles for the North American market will be produced at a recently opened plant in Ridgeville, South Carolina.
A Polestar spokesperson assured TechCrunch that it does not share personal data of its North American and European customers with China and that the automaker must comply with GDPR laws because it is headquartered in Sweden.
Nonetheless, the bill does not exempt cars produced in friendly countries or domestically from scrutiny. If passed, the bill would give the Commerce Department the authority to review all sales, imports or other transactions involving connected vehicles “designed, manufactured or supplied” by any company with ties to China or an affiliated country.
The bill would take traditional means of trade restrictions, such as tariffs, one step further and potentially ban U.S.-bound connected vehicles manufactured by Chinese companies in countries such as Mexico. This could be aimed at automakers like BYD, whose CEO Stella Lee said in February that the automaker was looking for a factory in Mexico.
The bill would also strengthen national security protections and give the Commerce Department and other federal agencies clear legal authority to prevent future administrations from revoking those protections, Slotkin said.
Slotkin pointed to then-President Donald Trump's order authorizing the United States to address security risks at TikTok, a social media platform owned by Chinese company ByteDance. In April, President Joe Biden signed a bill banning TikTok unless ByteDance sells the app. Trump, who is running for re-election this November, later walked back his previous stance and opposed efforts to force a sale.
The growing U.S. concerns about China's data capabilities come as the country relaxes rules governing cross-border data flows. Tesla is reportedly trying to leverage this to get approval to send its own connected car data back to the U.S. to train Tesla's “fully self-driving” algorithms.
Slotkin's bill comes as the Commerce Department pledged to issue a ruling on Chinese connected vehicles later this year after the Biden administration launched an investigation into their national security risks in February.
Slotkin plans to introduce the bill after June 3, when Congress returns to session after the Memorial Day recess.
This article has been updated to include comments from Polestar. Originally published at 8:55 a.m. PT.
