the car developed in Europe

Yesterday, news shook the automotive industry: the United States will ban the sale of vehicles with Chinese parts or software. A measure that has to be approved and that is pending the receipt of the appropriate resources. But, in essence, it seems that the decision has been made.

It is a huge challenge.

ProhibitedThe measure promoted by Joe Biden’s government is about prohibiting the sale of all types of cars that use Chinese software or hardware that could be used for purposes contrary to national security.

That includes the import of any type of car from a Chinese manufacturer (which already faced 100% tariffs) but also all cars from Western manufacturers produced in China or that, in one way or another, use parts or services that can connect to the Internet.

In practice, that rules out any modern car where the involvement of a Chinese manufacturer is significant. That is, it rules out a car produced in China, but also one produced in the United States with a Chinese battery, with Chinese chips, with Chinese cameras or almost any other element that comes to mind.

A remote boycottThe US government has argued that with these systems, a government like that of China or Russia (which are also affected by the measure) has remote access to vehicles and can block or control thousands of cars, causing mass accidents.

“It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of American citizens. In an extreme situation, foreign adversaries could shut down or take control of all of their vehicles operating in the United States at the same time,” said Gina Raimondo, the country’s Secretary of Commerce.

A little pleaseThat is what manufacturers have had to tell US policymakers, as the measure will come into force in 2027 and will not be fully implemented until 2030. The first pillar affected will be the software one, and then the restrictions will be extended to the rest of the components.

In April, in view of the direction the issue was taking, the Alliance for Automotive Innovation (a group that includes companies such as Ferrari, Honda and Ford, among many others) had already warned that replacing all of its parts with products produced outside of China would take time. The Government’s response, reported by The Washington Postis that this decision is being taken now before the presence of these components becomes even greater.

Almost, almost everything. “Banning a car with Chinese parts is like banning cars,” said a commentator in the first news story in which we explained this new ban that the United States wants to lift. That is why the Department of Commerce assured that this would not apply to “passive parts” such as “screws and bolts or plastics,” in words collected by Wired.

However, the current technological volume of cars is such that manufacturers will have to work hard to find new suppliers to guarantee that their services have not been outsourced to Chinese companies. A good example is the small part that left hundreds of Audi and Porsche cars stranded in customs.

Directly affected. Two of the manufacturers most affected by the new measure will be Ford and General Motors. The former manufacture the Lincoln Nautilus in China, of which they sold 17,500 units in the first half of 2024. The latter do the same with the Buick Envision, of which they placed 22,000 units on the market during the same period of time.

BYD makes the electric buses used in California, and brands such as Volvo and Polestar are managed by Geely, one of the largest Chinese automotive groups. For all of them, the Department of Commerce has assured that it will open avenues for exceptionality if the manufacturers comply with a series of requirements that are yet to be defined.

A huge challenge. The biggest sufferers, however, may be European manufacturers. It should be noted that Chinese manufacturers have long been wary of US expansion plans. However, Europeans have long been looking to China as a way of making their cars cheaper.

It’s not just about manufacturing there. Stellantis will completely abandon the idea of ​​marketing Leapmotor in the United States. Volkswagen will have to develop specific software for the United States and will not be able to benefit from the synergies with XPeng, signed only a few months ago. Tesla will have to target Panasonic batteries for the US market in all cases. BMW will also not be able to send cars there with CATL batteries.

But in addition to all of the above, manufacturers will have to find suppliers for cameras, sensors, radars, Wi-Fi repeaters and any other type of component that collects, stores or sends data while driving.

“Almost zero”. According to Steve Man, global head of automotive research at Bloomberg Intelligence, as reported by Wired“Few Chinese and Russian companies supply automotive software or hardware in the United States at this time.”

For Lei Xing, former editor-in-chief of China Auto Review and an independent analyst, “the proposed ban on connected vehicles would be a death sentence for any Chinese manufacturer wanting to enter the United States.” He sums up the chances of any company being able to take advantage of the exceptions expected from the law as “almost zero.”

Photo | Volkswagen

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