This article is written by Austin Garcia
On Monday, U.S. regulators unveiled a plan to ban certain connected vehicles equipped with hardware or software linked to China or Russia. This initiative aims to tighten oversight over automotive supply chains and mitigate potential national security risks. The ban targets technologies that could allow foreign entities to extract sensitive data or remotely operate vehicles. It applies to on-road vehicles such as cars, trucks, and buses, but excludes non-public road vehicles like trains and agricultural machinery.
In February, the Biden administration signaled its intention to investigate the risks posed by connected vehicle supply chains. Industry stakeholders were consulted to determine the most effective regulatory approach.
The proposed rule focuses on two technology categories:
- Hardware and software related to vehicle connectivity systems.
- Software involved in automated driving systems.
Examples include fleet tracking telematics and autonomous vehicle software, while low-risk technologies like lidar and keyless entry fobs are excluded. Connected vehicles offer benefits such as enhanced safety and navigation assistance. However, they also pose threats due to their ability to control vehicle movement and collect sensitive data.
The rule defines components linked to China or Russia as those designed, developed, manufactured, or supplied by entities under the jurisdiction or control of these countries. Automakers have several years to adjust their supply chains. Prohibitions on covered software will take effect in model year 2027, while bans on certain hardware imports and sales will begin in model year 2030.
The US ban on the import of certain vehicle parts from China and Russia, primarily for national security, could have significant implications for Mexico’s electric vehicle (EV) manufacturers. This could lead to supply chain adjustments, increased demand, investment opportunities, and regulatory compliance. Mexican manufacturers may need to reassess their supply chains to avoid reliance on these countries, potentially resulting in increased costs and delays. The ban could also encourage foreign investment in Mexico’s EV industry, as companies seek stable manufacturing bases. Despite initial challenges, the ban could ultimately benefit Mexico’s EV industry by opening up new opportunities and encouraging further investment.
The delayed timeline aims to provide automakers with the time and flexibility needed to comply. Automakers can request exceptions and self-certify compliance to encourage transparency. The proposal notes that there is currently a limited amount of hardware and software linked to China or Russia in U.S. vehicles. However, automakers often lack full visibility into their supply chains. The Department of Commerce aims to address national security risks before Chinese and Russian suppliers proliferate in the U.S. automotive ecosystem. Regulators are seeking public comments on the proposed rule over the next month before finalizing it.
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