The US Commerce Department is preparing to unveil rules aimed at banning Chinese automotive components—both hardware and software—over national security risks.

News broke in late July that the Commerce Department was preparing to implement rules to restrict Chinese software in US automobiles, with reports indicating the rules could be unveiled as early as August.

“We’re looking at a few components and some software – not the whole car – but it would be some of the key driver components of the vehicle that manage the software and manage the data around that car that would have to be made in an allied country,” Alan Estevez, export controls chief, said at the time.

“A car is a very scary thing. Your car knows a lot about you. Your car probably gets a software update, whether it’s an electric vehicle or an autonomous combustion engine vehicle,” he added.

“A modern car has a lot of software in it. It’s taking lots of pictures. It has a drive system. It’s connected to your phone. It knows who you call. It knows where you go. It knows a lot about you.”

While August came and went with no rules, The Information is reporting that the Commerce Department could unveil new rules as early as Monday, rules that will prohibit Chinese software and hardware in connected and autonomous vehicles.

China’s automotive industry has been a growing concern for lawmakers, with the Biden administration enacting new tariffs on the import of Chinese automobiles in the first half of 2024. Officials and experts are concerned about Chinese vehicle imports for two reasons:

• Beijing has subsidized its EV auto industry, giving it an unfair competitive advantage again other automakers. If Chinese automakers gain a foothold in the US, it could spell doom for the American auto industry.
• An even bigger concern is the security implications of Chinese autos having unrestricted access to American roads and driver data. US automakers have recently faced scrutiny and lawsuits for collecting a mass quantity of data on drivers. Lawmakers are concerned about the amount of data Chinese autos could collect, both on drivers and on their surrounds. Given that Chinese companies are legally obligated to aid Beijing in their surveillance and espionage efforts, Chinese vehicles on American roads could pose a serious national security threat by recording information about infrastructure and sensitive locations.

Given the concerns lawmakers have, it’s not surprising the Commerce Department is preparing to issue rules to restrict Chinese automotive components.