Chinese EV makers, and their connected vehicles, targeted by new House bill | TechCrunch (2024)

Chinese EV manufacturers face a new challenge in their pursuit of U.S. customers: a new House bill that would limit or ban the introduction of their connected vehicles.

The bill, introduced by U.S. Rep. Elissa Slotkin, comes as the trade war between the U.S. and China heightens in the aftermath of the Biden administration’s decision to quadruple import duties on Chinese electric vehicles to 100%.

Chinese EV manufacturers haven’t yet made significant inroads into the U.S., as they have in Europe. The bill’s goal appears to curb manufacturers before they can flood the American market with smart, cheap cars.

Slotkin, a former CIA analyst and Pentagon official, has repeatedly warned Congress about the threat posed by Chinese-built connected vehicles. Earlier this month in a speech on the House floor, Slotkin outlined how the Chinese government has heavily subsidized its auto industry to sell advanced, low-cost EVs equipped with sensors like lidar, radar and cameras that are capable of collecting and transmitting data back to Chinese authorities.

“If allowed into our markets, Chinese connected vehicles offer the Chinese government a treasure trove of valuable intelligence on the United States, including the potential to collect information on our military bases, critical infrastructure like the power grid and traffic systems, and even locate specific U.S. leaders should they so choose,” said Slotkin in a statement released Wednesday. “China owns a fast-growing share of the connected auto market in Europe and Mexico, so now is the time to make sure our defenses are up, before these vehicles enter the U.S. market.”

Last week, provisions that Slotkin championed — like a ban on Chinese connected vehicles at U.S. military bases and a prohibition on procuring Chinese-made lidar by the Department of Defense — made it into the U.S. government’s annual defense spending bill.

Slotkin’s bill, called the Connected Vehicle National Security Review Act, if passed into law, wouldn’t just review EVs but also autonomous vehicles. A number of AV companies with ties to China, like WeRide and Pony.ai, have active permits to test in California. Alphabet’s Waymo also has a deal with Chinese startup Zeekr to produce purpose-built robotaxis.

Waymo did not respond to TechCrunch’s request for comment on this bill.

How this bill will affect Chinese EVs

As far as EVs go, Volvo and Polestar have a presence in the United States, and both are owned by China’s Geely Automotive. The majority of Volvo vehicles are assembled in Sweden, and the next generation of Volvo vehicles for the North American market will be built in a recently opened plant in Ridgeville, South Carolina.

A Polestar spokesperson assured TechCrunch that it doesn’t share personal data from North American and European customers with China, and that as the automaker is headquartered in Sweden, it’s required to comply with GDPR laws.

Regardless, this bill would not free cars built in friendly nations, or domestically, from scrutiny. If passed, the bill would give the Department of Commerce authority to review any sale, importation or other transaction that involves a connected vehicle “designed, built or supplied” by any company that’s at all connected with China or a country of concern.

The bill takes traditional trade-restriction tools like tariffs one step further by potentially banning connected vehicles bound for the U.S. that are manufactured by Chinese companies in countries like Mexico. That could be aimed at carmakers like BYD, whose CEO Stella Li said in February that the automaker was shopping for a plant in Mexico.

The bill would also give clear legal power to the Department of Commerce and other federal agencies to strengthen national security protections and prevent future administrations from undoing these protections, a move Slotkin said is not a hypothetical.

Slotkin pointed to then-President Donald Trump’s order that would have given the U.S. authority to address security risks from social media platform TikTok, which is owned by Chinese company ByteDance. President Joe Biden in April signed a bill that would ban TikTok unless ByteDance sold the app. Trump, who is running for re-election this November, has since backtracked on his previous position and even opposed the efforts to force a sale.

The U.S.’s elevated concerns over China’s data prowess come as Beijing relaxes rules that govern cross-border data flows. Tesla is reportedly trying to take advantage of this to get the green light to send its own connected car data back to the U.S. to train Tesla’s “full self-driving” algorithms.

Slotkin’s bill also comes as the Department of Commerce promises to issue a ruling on Chinese connected vehicles later this year, following the Biden administration’s launch of a probe in February into the national security risks of such vehicles.

Slotkin plans to introduce the bill after June 3, once Congress is back in session after the Memorial Day recess.

This article was updated to include comment from Polestar. It was originally published at 8:55 a.m. PT.

Chinese EV makers, and their connected vehicles, targeted by new House bill | TechCrunch (2024)

FAQs

Chinese EV makers, and their connected vehicles, targeted by new House bill | TechCrunch? ›

If passed, the bill would give the Department of Commerce authority to review any sale, importation or other transaction that involves a connected vehicle “designed, built or supplied” by any company that's at all connected with China or a country of concern.

Which Chinese EV company is the best? ›

Top 6 Chinese Electric Vehicle Companies
  1. BYD. BYD (Build Your Dreams) became a major player on the EV scene in 2022 when it stepped up its production of EVs by a massive 200%. ...
  2. Geely. ...
  3. Nio. ...
  4. SAIC Motor. ...
  5. XPeng. ...
  6. Li Auto.
May 2, 2024

What is the name of the Chinese electric car company? ›

BYD is a leading electric vehicle manufacturer in China, known for its diverse range of eco-friendly vehicles. SAIC Motor is a leading Chinese automaker with a wide range of vehicles, including electric and luxury models. NIO Inc. NIO is a rapidly growing Chinese vehicle manufacturer in 2023.

How much are Chinese EV cars? ›

Meanwhile, cheap — really cheap — Chinese EVs are proliferating. The BYD Seagull costs just $10,000 in China.

What is the incentive for electric cars in China? ›

The EV incentive package, worth a total of $72 billion, was first introduced in June and will run until 2028. EVs bought in 2024 and 2025 will be exempted from sales tax up to a maximum of 30,000 yuan ($4,180). The maximum tax exemption falls to 15,000 yuan ($2,090) in 2026 and 2027.

What is the #1 selling electric car in China? ›

The BYD Song was the best-selling EV in China last year, repeating its 2022 success. The model finished 2023 more than 100,000 units ahead of the second-place Tesla Model Y. The US crossover surpassed the BYD Qin Plus at the very end of last year.

Which Chinese EVs are coming to the US? ›

President Biden's EV fixation is resulting in China-made electric vehicles coming to the United States this summer, at a price about $8,000 less than its intended competition, a Tesla Model Y. The vehicle is called the Volvo EX30, and will avoid tariffs because Volvo has a plant in the United States.

Are BYD cars better than Tesla? ›

While Tesla excels in innovation, design, and global reach, BYD's strengths lie in its diverse product lineup, battery technology, and market dominance in China. Ultimately, the competition between these two titans benefits consumers, driving continued innovation and advancement in the EV market.

Who is Tesla's rival in China? ›

BYD has been competing with Elon Musk's Tesla to be the world's biggest seller of EVs. The US giant reclaimed the title earlier this month after losing out to its Chinese rival at the end of last year.

Are BYD cars sold in the US? ›

According to BYD, there are no plans to sell these very affordable EVs in the US. But the company—which is scouting plant locations in Mexico—might have a very good economic incentive to do so.

Why are Chinese EVs not sold in the US? ›

Electric Car Exports From China Have Soared Over Past Year

But tariffs are just the first hurdle for a global car company looking to crack the US market. Most Chinese cars haven't been engineered with US safety regulations in mind; just going through those protocols is an expensive and elaborate process.

Can I buy a Chinese car in the USA? ›

Currently, there are no Chinese-branded cars for sale in the United States.

Why are Chinese electric cars so cheap? ›

Chinese EVs also tend to be cheaper than Western-made cars partly because much of the manufacturing process involved in producing car batteries is carried out by Chinese companies.

How much does the US government subsidize electric cars? ›

New Plug-in and Fuel Cell Electric Vehicles Purchased Before 2023. Get a tax credit of up to $7,500 for new vehicles purchased before 2023! The amount varies based on battery capacity and manufacturer phase-out.

Why is China leading in electric vehicles? ›

The country's strength in the manufacture and supply chain for EV batteries underpins the growth of its wider EV industry. In fact, China's largest EV manufacturer, BYD Auto, was originally a battery maker that supplied mobile phone companies. In the 2000s, the company entered the EV market.

Is BYD owned by China? ›

BYD Company Limited or BYD (Chinese: 比亚迪; pinyin: Bǐyàdí) is a publicly listed Chinese multinational conglomerate manufacturing company headquartered in Shenzhen, Guangdong province, founded by Wang Chuanfu in February 1995.

Who dominates the EV market in China? ›

BYD increased its dominance as the best-selling EV brand in China, accounting for 29.8% of all deliveries in the first four months of the year. This was up 0.5 percentage points (pp) from the previous month.

Who is the No 1 EV company? ›

Top EV Stocks in India in 2024 as per Market Capitalisation
S.No.EV Stocks in India (as per market capitalisation)
1.Tata Motors
2.Maruti Suzuki India
3.Bajaj Auto
4.Mahindra & Mahindra
2 more rows

What are the top 10 Chinese car brands? ›

China is the world's largest car market. Major Chinese car manufacturers include FAW, Dongfeng, Changan, SAIC, Chery, GAC, BAIC, and others. Joint ventures with foreign car companies are significant in China's automotive industry. Chinese car brands are expanding globally, particularly in electric vehicles.

Which Chinese EV sells more than Tesla? ›

BYD overtook Tesla to become the world's biggest electric car company in the final quarter of 2023. The Chinese company sold a record number of cars last year, including 525,409 battery electric vehicles (BEVs) in the three-month period to December 31, according to a stock exchange filing.

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