Biden administration to investigate national security risks posed by Chinese-made ‘smart cars’

WASHINGTON — Citing potential national security risks, the Biden administration says it will investigate Chinese-made “smart cars” that could collect sensitive information about the Americans who drive them.

The investigation could lead to new regulations aimed at preventing China from using advanced technology in electric cars and other so-called connected vehicles to track drivers and their personal information. Officials are concerned that features such as driver assistance technology could be used to effectively spy on Americans.

Although the action will end before a ban on Chinese imports, President Joe Biden said he is taking unprecedented steps to protect U.S. data.

“China is determined to dominate the future of the auto market, including through unfair practices,” Biden said in a statement Thursday. “China’s policies could flood our market with its vehicles, which could pose risks to our national security. I’m not going to let that happen while I’m waiting.”

Biden and other officials noted that China has imposed sweeping restrictions on American cars and other foreign vehicles.

Commerce Secretary Gina Raimondo said connected cars are “like smartphones on wheels” and pose a serious risk to national security.

“These vehicles are connected to the internet. They collect huge amounts of sensitive data about the drivers – personal information, biometric information, where the car is going,” she told reporters late on Wednesday. “So it doesn’t take much imagination to figure out how a foreign adversary like China, with access to this kind of information on a massive scale, could pose a serious risk to our national security and the privacy of American citizens.”

Data collection isn’t the only concern, she and other officials said. Connected vehicles can also be remotely armed or manipulated by bad actors.

“Imagine if there were thousands or hundreds of thousands of China-linked vehicles on American roads that could be taken out immediately and simultaneously by someone in Beijing,” Raimondo said. “So it’s scary to think about the cyber risks and the espionage risks they pose.”

Few Chinese cars are currently imported into the United States, in part because of the high tariffs the U.S. imposes on vehicles imported from China. Still, officials are concerned that the rates won’t be enough to address the problem. Some Chinese companies are trying to avoid US tariffs by setting up assembly plants in nearby countries, such as Mexico.

Under a plan announced Thursday, the Commerce Department will issue an advance notice of proposed rulemaking that will launch an investigation into national security risks posed by “connected vehicles” from China and other countries deemed hostile to the United States considered.

The trade will seek information from the auto industry and the public about the nature of the risks and possible steps to mitigate them, the White House said. Officials will then develop potential regulations to govern the use of technology in vehicles from China and other “countries of concern,” including Russia and Iran.

“We’re doing it now before Chinese-made vehicles become widespread in the United States and potentially threaten our privacy and national security,” Raimondo said.

The investigation is the first action taken by the Commerce Department’s Bureau of Industry and Security under executive orders issued by Biden to protect domestic information and communications technology from national security threats.

Electric vehicles and other cars increasingly rely on advanced technologies to enable navigation aids, provide driver assistance features and reduce operating costs and carbon emissions through fast charging, the White House said. The cars constantly connect to personal devices, other cars, U.S. infrastructure and their original manufacturer, posing national security risks, the White House said.

New vulnerabilities and threats “could arise with connected cars if a foreign government were to gain access to these vehicles’ systems or data,” the White House said.

High tariffs imposed by the Trump administration and continued by Biden have effectively deterred Chinese automakers from entering the U.S. market, but U.S. officials and industry leaders are concerned that Chinese companies could choose to absorb the additional costs, as China relies more heavily on exports. Chinese carmakers are looking to build more vehicles abroad, with EV giant BYD announcing plans for its first European factory last year.

Ford CEO Jim Farley said his company and others will struggle to compete in electric vehicles with Chinese automakers, which have gone from no EV market share in Europe two years ago to about 10% now.

John Bozzella, chairman of the Alliance for Automotive Innovation, which represents major automakers, said the proposed U.S. environmental rules could give China “a stronger foothold in the U.S. electric vehicle battery supply chain and ultimately in our auto market.”

The European Union, concerned about rising imports from China, opened a trade investigation last year into Chinese subsidies for electric vehicles. The investigation is ongoing.

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Associated Press writers Josh Boe in Washington and Tom Krisher in Detroit contributed to this story.