U.S. to investigate national security risks posed by Chinese connected vehicle technology

WASHINGTON — The Biden administration on Thursday said it will investigate the national security risks posed by connected vehicles that use technology from China or other foreign adversaries.

The action comes amid growing concerns from the Biden administration, Congress and automakers over data security and the threat of Chinese automakers establishing a stronger presence in the U.S. market.

"These cars are connected to our phones, to navigation systems, to critical infrastructure, and to the companies that made them," President Joe Biden said in a statement Thursday. "Connected vehicles from China could collect sensitive data about our citizens and our infrastructure and send this data back to the People's Republic of China."

The Biden administration said new vulnerabilities and threats could arise if a foreign adversary gained access to a vehicle's data or systems — more specifically, the hardware and software that collect and transmit data wirelessly, such as telematics, advanced driver-assistance technology and, for electric cars, battery management systems.

"Many of these vehicles can be enabled and disabled remotely. Connected vehicles that have technologies sourced from China could be exploited in ways that threaten U.S. national security," Lael Brainard, White House national economic adviser, told reporters in a briefing Wednesday.

"China already has restrictions that do not allow connected vehicles to operate in China unless those vehicles only provide data to Chinese entities and use only Chinese software," Brainard added.

To address those concerns, the U.S. Commerce Department on Thursday launched a regulatory process to seek feedback and gather information from industry stakeholders and the public as it considers potential rules or other actions that govern the use of certain information and communications technology in vehicles from China.

"It doesn't take a lot of imagination to figure out how a foreign adversary like China — with access to this sort of information at scale — could pose a serious risk to our national security and the privacy of U.S. citizens," Commerce Secretary Gina Raimondo told reporters.

The department has not yet determined what action it would take, as it is still in the early stages of understanding the risks and how significant they might be.

"This is really the beginning of an inquiry, and we are collecting information," an administration official said during the briefing. "We are in no way committed to a ban on the import of Chinese electric vehicles. That really remains to be seen."

Some industry groups such as the UAW and the Alliance for American Manufacturing have urged the Biden administration to find ways to block China from entering the U.S. market through Mexico, where it could avoid tariffs.

However, the department's authorities, as part of its action Thursday "do not extend to tariffs," the official said.

The Alliance for Automotive Innovation, which represents major U.S. automakers as well as auto suppliers and tech companies, said it shares the administration’s goal of preserving the U.S. auto industry’s position as a leader “in technologies that expand mobility and safety for the traveling public.”

“It will be important for the Commerce department to work closely with the auto industry to determine the scope of any action,” the group said in a statement to Automotive News.

The alliance said it wants Commerce to target transactions that “pose unnecessary risks to U.S. economic and national security, and doesn’t capture low-risk transactions that could have unintended near-term impacts on advanced vehicle safety technologies essential to vehicles on the road today.”

Avery Ash, executive director of the Coalition for Reimagined Mobility, a project of SAFE, applauded the administration’s efforts.

“It’s welcome news to see the Biden administration taking concrete action today to understand and address the national security risks of connected vehicle technology designed, sold and controlled by companies beholden to the People’s Republic of China,” he said in a statement.

“Advanced vehicle technologies will define the automotive and transportation sectors for the next 100 years, and it’s essential that the U.S. act to maintain — and in some cases reclaim — our position as the global leader in this industry.”

The Chinese Embassy in Washington said Commerce’s action “will only exacerbate security risks in the global supply chain and ultimately harm others and itself” and that the U.S. should “immediately stop” its investigation.

“China firmly opposes the United States' generalization of the national security concept, instrumentalizing and weaponizing economic and trade issues, abusing administrative means, and conducting investigations without factual basis,” Liu Pengyu, a spokesperson for the embassy, said in a statement to Automotive News.

The embassy said the value of cars exported by the U.S. to China has been more than “three times that of China’s export of cars to the U.S.” in recent years and cited large investments being made in China by U.S. automakers such as Tesla.

“However, Chinese automakers’ investment in cars in the U.S. is almost negligible,” Pengyu said. “The so-called national security risk investigation is a clearly discriminatory approach.”