President Biden today announced today “strong action to protect America from the national security risks associated with connected vehicle technologies from countries of concern.” The Department of Commerce is issuing a notice of proposed rulemaking (NPRM) that would, if finalized as proposed, prohibit the sale or import of connected vehicles that incorporate certain technology and the import of particular components themselves from countries of concern, specifically the People’s Republic of China (PRC) and Russia.*
“Connected vehicles provide many benefits — from promoting vehicle safety to assisting drivers with navigation — but they also pose new and growing threats. These technologies include computer systems that control vehicle movement and collect sensitive driver and passenger data as well as cameras and sensors that enable automated driving systems and record detailed information about American infrastructure. Now more than ever, vehicles are directly connected into our country’s digital networks,” The White House said.
The Department of Commerce’s proposed rule would prohibit the import or sale of certain connected vehicle systems designed, developed, manufactured, or supplied by entities with a sufficient links to the PRC or Russia. Specifically, the rule covers “vehicle connectivity systems” (VCS). These are systems and components connecting the vehicle to the outside world via Bluetooth, cellular, satellite, and Wi-Fi modules and so-called “automated driving systems” (ADS), which allow highly autonomous vehicles to operate without a driver behind the wheel. The rule includes restrictions on imports or sales of connected vehicles using VCS and ADS software, as well as imports of VCS hardware equipment. The Department of Commerce is also proposing procedures to let certain parties, such as small producers of vehicles, receive exemptions from the prohibitions on an exceptional basis, in order to minimize unanticipated and unnecessary disruption to industry.
The announcement is the next step in a process President Biden announced in February 2024. This NPRM incorporates public feedback submitted in response to the Department’s advance notice of proposed rulemaking (ANPRM) issued on 1 March 2024, which sought public comment on the national security risks associated with certain technologies used in connected vehicles. The prohibitions on software would take effect for Model Year 2027, and the prohibitions on hardware would take effect for Model Year 2030, or 1 January 2029 for units without a model year. “These restrictions will help address national security risks posed by connected vehicle technologies from countries of concern,” Commerce said.
“The purpose of this rule is to ensure the information and communications technology and services systems in connected vehicles bypass suppliers from China and other countries of concern. That’s a national security goal automakers share with policymakers,” said John Bozzella, president and CEO of Alliance for Automotive Innovation.
“Important context: there’s actually very little technology – hardware or software – in today’s connected vehicle supply chain that enters the U.S. from China. But this rule will require auto manufacturers in some cases to find alternate suppliers. I’ve said this in other contexts, but it applies here too: you can’t just flip a switch and change the world’s most complex supply chain overnight. It takes time. The lead time included in the proposed rule will allow some auto manufacturers to make the required transition but may be too short for others. This was a thoughtful, thorough and consultative process by the Bureau of Industry and Security. We’ll provide additional perspective as they develop a final rule that reflects industry realities and achieves our shared national security,” Bozzella said.
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Connected Car Wars – Biden Takes on China and Russia
President Biden today announced today “strong action to protect America from the national security risks associated with connected vehicle technologies from countries of concern.” The Department of Commerce is issuing a notice of proposed rulemaking (NPRM) that would, if finalized as proposed, prohibit the sale or import of connected vehicles that incorporate certain technology and the import of particular components themselves from countries of concern, specifically the People’s Republic of China (PRC) and Russia.*
“Connected vehicles provide many benefits — from promoting vehicle safety to assisting drivers with navigation — but they also pose new and growing threats. These technologies include computer systems that control vehicle movement and collect sensitive driver and passenger data as well as cameras and sensors that enable automated driving systems and record detailed information about American infrastructure. Now more than ever, vehicles are directly connected into our country’s digital networks,” The White House said.
The Department of Commerce’s proposed rule would prohibit the import or sale of certain connected vehicle systems designed, developed, manufactured, or supplied by entities with a sufficient links to the PRC or Russia. Specifically, the rule covers “vehicle connectivity systems” (VCS). These are systems and components connecting the vehicle to the outside world via Bluetooth, cellular, satellite, and Wi-Fi modules and so-called “automated driving systems” (ADS), which allow highly autonomous vehicles to operate without a driver behind the wheel. The rule includes restrictions on imports or sales of connected vehicles using VCS and ADS software, as well as imports of VCS hardware equipment. The Department of Commerce is also proposing procedures to let certain parties, such as small producers of vehicles, receive exemptions from the prohibitions on an exceptional basis, in order to minimize unanticipated and unnecessary disruption to industry.
The announcement is the next step in a process President Biden announced in February 2024. This NPRM incorporates public feedback submitted in response to the Department’s advance notice of proposed rulemaking (ANPRM) issued on 1 March 2024, which sought public comment on the national security risks associated with certain technologies used in connected vehicles. The prohibitions on software would take effect for Model Year 2027, and the prohibitions on hardware would take effect for Model Year 2030, or 1 January 2029 for units without a model year. “These restrictions will help address national security risks posed by connected vehicle technologies from countries of concern,” Commerce said.
“The purpose of this rule is to ensure the information and communications technology and services systems in connected vehicles bypass suppliers from China and other countries of concern. That’s a national security goal automakers share with policymakers,” said John Bozzella, president and CEO of Alliance for Automotive Innovation.
“Important context: there’s actually very little technology – hardware or software – in today’s connected vehicle supply chain that enters the U.S. from China. But this rule will require auto manufacturers in some cases to find alternate suppliers. I’ve said this in other contexts, but it applies here too: you can’t just flip a switch and change the world’s most complex supply chain overnight. It takes time. The lead time included in the proposed rule will allow some auto manufacturers to make the required transition but may be too short for others. This was a thoughtful, thorough and consultative process by the Bureau of Industry and Security. We’ll provide additional perspective as they develop a final rule that reflects industry realities and achieves our shared national security,” Bozzella said.
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