Chinese EV manufacturers face a significant challenge in their efforts to enter the US market due to a new House bill introduced by Rep. Elissa Slotkin. This bill aims to limit or even ban the introduction of connected vehicles from Chinese manufacturers. The introduction of this bill comes as the trade war between the US and China escalates, with the Biden administration quadrupling import duties on Chinese electric vehicles to 100%.
Chinese EV manufacturers have already made considerable progress in Europe, but they have yet to achieve the same level of success in the US. The goal of Slotkin’s bill appears to be preventing these manufacturers from flooding the American market with affordable, technologically advanced vehicles.
Slotkin, a former CIA analyst and Pentagon official, has repeatedly warned Congress about the potential threats posed by Chinese-built connected vehicles. She has highlighted how the Chinese government has heavily subsidized its auto industry, allowing them to sell low-cost EVs equipped with advanced sensors capable of collecting and transmitting data back to Chinese authorities. Slotkin argues that if Chinese connected vehicles were allowed into the US market, they could provide valuable intelligence to the Chinese government, including information on military bases, critical infrastructure, and even the location of specific US leaders.
Last week, provisions supported by Slotkin, such as a ban on Chinese connected vehicles at US military bases and a prohibition on procuring Chinese-made lidar by the Department of Defense, were included in the US government’s annual defense spending bill.
Slotkin’s bill, known as the Connected Vehicle National Security Review Act, not only focuses on reviewing EVs but also autonomous vehicles. Several autonomous vehicle companies with ties to China, such as WeRide and Pony.ai, have active permits to test their vehicles in California. Additionally, Alphabet’s Waymo has a partnership with Chinese startup Zeekr to produce purpose-built robotaxis.
It is unclear how this bill will specifically impact Chinese EVs already present in the US market. Companies like Volvo and Polestar, both owned by China’s Geely Automotive, have a presence in the US. While Volvo vehicles are primarily assembled in Sweden, the next generation of Volvo vehicles for the North American market will be manufactured at a newly opened plant in South Carolina. A Polestar spokesperson has assured that the company does not share personal data from North American and European customers with China and complies with GDPR laws.
If passed, Slotkin’s bill would give the Department of Commerce the authority to review any sale, importation, or transaction involving a connected vehicle related to China or a country of concern. This includes cars manufactured by Chinese companies in other countries like Mexico. The bill also aims to give clear legal power to federal agencies to enhance national security protections and prevent future administrations from undoing these safeguards.
The concerns raised by this bill are not unfounded, as they align with the US government’s growing worries about China’s data capabilities. Beijing has recently relaxed rules governing cross-border data flows, while the US Department of Commerce plans to issue a ruling on Chinese connected vehicles later this year following a probe launched by the Biden administration into the national security risks associated with such vehicles.
Rep. Slotkin plans to introduce the bill after June 3, once Congress is back in session after the Memorial Day recess. It remains to be seen how this bill will progress and what impact it will have on Chinese EV manufacturers’ ambitions in the US market.