July 19, 2024
Self-driving taxis are tested on a street in Ordos, Inner Mongolia, China


Chinese EV manufacturers face a new challenge in their pursuit of U.S. customers: a new House bill that would limit or ban the introduction of their connected vehicles.

The bill, introduced by U.S. Rep. Elissa Slotkin, comes as the trade war between the U.S. and China heightens in the aftermath of the Biden administration’s decision to quadruple import duties on Chinese electric vehicles to 100%. 

Chinese EV manufacturers haven’t yet made significant inroads into the U.S., as they have in Europe. The bill’s goal appears to curb manufacturers before they can flood the American market with smart, cheap cars. 

Slotkin, a former CIA analyst and Pentagon official, has repeatedly warned Congress about the threat posed by Chinese-built connected vehicles. Earlier this month in a speech on the House floor, Slotkin outlined how the Chinese government has heavily subsidized its auto industry to sell advanced, low-cost EVs equipped with sensors like lidar, radar and cameras that are capable of collecting and transmitting data back to Chinese authorities. 

“If allowed into our markets, Chinese connected vehicles offer the Chinese government a treasure trove of valuable intelligence on the United States, including the potential to collect information on our military bases, critical infrastructure like the power grid and traffic systems, and even locate specific U.S. leaders should they so choose,” said Slotkin in a statement released Wednesday. “China owns a fast-growing share of the connected auto market in Europe and Mexico, so now is the time to make sure our defenses are up, before these vehicles enter the U.S. market.”

Last week, provisions that Slotkin championed — like a ban on Chinese connected vehicles at U.S. military bases and a prohibition on procuring Chinese-made lidar by the Department of Defense — made it into the U.S. government’s annual defense spending bill

Slotkin’s bill, called the Connected Vehicle National Security Review Act, if passed into law, wouldn’t just review EVs but also autonomous vehicles. A number of AV companies with ties to China, like WeRide and Pony.ai, have active permits to test in California. Alphabet’s Waymo also has a deal with Chinese startup Zeekr to produce purpose-built robotaxis. 

Waymo did not respond to TechCrunch’s request for comment on this bill.

How this bill will affect Chinese EVs

As far as EVs go, Volvo and Polestar have a presence in the United States, and both are 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 in a recently opened plant in Ridgeville, South Carolina. 

A Polestar spokesperson assured TechCrunch that it doesn’t share personal data from North American and European customers with China, and that as the automaker is headquartered in Sweden, it’s required to comply with GDPR laws.

Regardless, this bill would not free cars built in friendly nations, or domestically, from scrutiny. If passed, the bill would give the Department of Commerce authority to review any sale, importation or other transaction that involves a connected vehicle “designed, built or supplied” by any company that’s at all connected with China or a country of concern. 

The bill takes traditional trade-restriction tools like tariffs one step further by potentially banning connected vehicles bound for the U.S. that are manufactured by Chinese companies in countries like Mexico. That could be aimed at carmakers like BYD, whose CEO Stella Li said in February that the automaker was shopping for a plant in Mexico

The bill would also give clear legal power to the Department of Commerce and other federal agencies to strengthen national security protections and prevent future administrations from undoing these protections, a move Slotkin said is not a hypothetical. 

Slotkin pointed to then-President Donald Trump’s order that would have given the U.S. authority to address security risks from social media platform TikTok, which is owned by Chinese company ByteDance. President Joe Biden in April signed a bill that would ban TikTok unless ByteDance sold the app. Trump, who is running for re-election this November, has since backtracked on his previous position and even opposed the efforts to force a sale. 

The U.S.’s elevated concerns over China’s data prowess come as Beijing relaxes rules that govern cross-border data flows. Tesla is reportedly trying to take advantage of this to get the green light to send its own connected car data back to the U.S. to train Tesla’s “full self-driving”  algorithms. 

Slotkin’s bill also comes as the Department of Commerce promises to issue a ruling on Chinese connected vehicles later this year, following the Biden administration’s launch of a probe in February into the national security risks of such vehicles. 

Slotkin plans to introduce the bill after June 3, once Congress is back in session after the Memorial Day recess.

This article was updated to include comment from Polestar. It was originally published at 8:55 a.m. PT.



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