The U.S. Department of Commerce announced on Thursday its plan to examine the national security implications of connected vehicle supply chains that have connections to China. This move is part of broader efforts to ensure the security of supply chains critical to the United States. Secretary of Commerce Gina Raimondo highlighted the potential risks associated with foreign governments having access to data from connected vehicles, emphasizing the importance of protecting both national security and personal privacy of U.S. citizens.
The investigation into connected vehicle supply chains represents another step by the U.S. in regulating supply chains to bolster national security. Initiatives by the Biden-Harris administration in recent years have included promoting domestic production of semiconductors, encouraging the relocation of manufacturing closer to the U.S., and implementing restrictions on trade with foreign entities deemed a concern. These policies have had significant implications for the strategies automakers use in their supply chains.
The administration has raised specific concerns regarding the involvement of China-linked firms in the design, development, manufacturing, and supply of materials for connected vehicles. According to a White House fact sheet, reliance on foreign technology and data systems in vehicles could potentially be exploited for espionage or sabotage, posing a threat to national security. The fact sheet further states that connected vehicles can collect extensive sensitive data, have capabilities to record detailed information about U.S. infrastructure through their cameras and sensors, interact with critical infrastructure, and can be controlled or disabled remotely.
The Commerce Department’s investigation will start with a request for comments from stakeholders on the subject. This input will help determine whether to propose rules limiting transactions with entities connected to foreign governments, such as China, involved in the connected vehicle supply chain. Among the issues for which the Commerce Department seeks feedback are the definitions of terms, the identification of transactions that could pose risks to national security, potential measures to mitigate these risks, and the possibility of exceptions to any new regulations.
President Joe Biden has also criticized China’s ambitions to dominate the automotive market, citing “unfair practices” and attempts to “flood the U.S. market with its vehicles” as grounds for the investigation. He referenced China’s restrictions on the use of Tesla vehicles by its military and state employees, as reported by The Wall Street Journal in 2021, as an example of the need for safeguards against connected vehicles from China operating in the U.S.
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