### US to Prohibit Chinese and Russian Connected Vehicle Systems by Model Year 2027: Key Information
The United States government is enacting crucial measures to enhance national security and safeguard its automotive industry by instituting a new regulation that will prohibit the import of vehicles featuring connected-car software and hardware from China or Russia. This rule, issued by the Department of Commerce and published in the Federal Register, will be applicable to vehicles of model year 2027 for software and model year 2030 for hardware. While the primary driver is the concern over cybersecurity vulnerabilities, it also affects the global automotive market and international trade dynamics.
—
### **Reasons for the Ban**
The US government emphasizes national security as the main justification for this prohibition. Contemporary vehicles heavily depend on sophisticated hardware and software systems that facilitate connectivity, advanced driving assistance, and even self-driving functions. Although these systems are cutting-edge, they also harbor potential weaknesses. The government has voiced concerns that “malicious actors and foreign adversaries” might take advantage of these vulnerabilities to jeopardize national security.
The emphasis on China and Russia arises from the perception that enterprises situated in these nations, or those governed by their authorities, present an unacceptably elevated risk of cyber espionage or interference. By limiting the usage of connected-car systems from these countries, the US intends to reduce the likelihood of such dangers.
—
### **Details of the Ban**
The regulation particularly focuses on hardware and software facilitating connectivity above 450 MHz and automated driving system (ADS) software. However, it does not encompass ADS sensors or other hardware elements. Initially, the government considered a broader scope that incorporated operating systems (OS), telematics, battery management systems, and advanced driver assistance systems (ADAS). Following public consultations, the focus was refined to target the most significant vulnerabilities.
Telematics, which function over cellular connections and are deemed a primary attack vector, are already governed by existing regulations. This approach ensures that the new rule remains focused and avoids redundant overlap with prevailing cybersecurity protocols.
—
### **Exemptions and Authorizations**
The prohibition is not unconditional and includes several exceptions:
1. **Legacy Vehicles:** The rule does not retroactively apply to vehicles from model year 2027 for software and model year 2030 for hardware. This includes parts brought in for warranty or repair, recognizing that any risks associated with older systems would have already manifested.
2. **Light-Duty Vehicles Only:** The regulation specifically pertains to light-duty vehicles with a gross vehicle weight rating below 10,000 pounds. Heavier commercial vehicles will be governed by a separate rule tailored for that sector.
3. **Special Permissions:** Companies may apply for permission to import otherwise banned software or hardware. However, these applications must fulfill strict governmental standards and might be bound by specific stipulations.
—
### **Effects on the Automotive Sector**
#### **Challenges for Suppliers**
This new regulation is anticipated to significantly affect automotive suppliers. Even one Chinese-made component within a larger system could initiate the import ban, compelling suppliers to reevaluate their sourcing strategies. This could result in heightened costs and delays as firms adapt to meet the new regulations.
#### **Minimal Effect on US Consumers**
Currently, the rule is not expected to disrupt the US car market drastically. The limited number of Chinese vehicles sold in the US—such as models from Polestar, Volvo, Lincoln, and Buick—will remain available until the regulations come into force. However, Polestar’s Chinese ownership may complicate its status compared to American-owned companies like Ford and GM.
#### **Polestar’s Actions**
Polestar, a Swedish brand owned by China’s Geely, has proactively addressed potential issues arising from the new regulation. Attorneys for the company recently consulted with the Department of Commerce to assess the ban’s implications. While no formal announcement has been made, the automaker’s proactive stance indicates it is seeking avenues to adapt to the evolving regulatory environment.
—
### **Wider Consequences**
#### **National Security vs. Trade Relations**
The ban underscores the escalating friction between national security priorities and international trade. Although the US government presents the rule as a vital measure to protect against cybersecurity threats, it additionally serves to shield domestic manufacturers from competition with lower-cost imports. This dual purpose could tension trade relations with China and Russia, especially as the rule distinctly targets enterprises from these nations.
#### **Technological Separation**
This regulation is part of a larger pattern of technological separation between the US and China. By restricting the integration of Chinese components in essential industries like automotive technology, the US is signaling its intention to lessen dependency on foreign adversaries for critical innovations.
#### **Upcoming Regulations**
The Department of Commerce has indicated that this new rule is merely the start. Additional regulations aimed at the commercial vehicle sector are anticipated in the near future, suggesting the government is taking comprehensive measures to tackle cybersecurity issues.
