Are Chinese Connected Vehicles a U.S. National Security Threat?

Author:
Jason Lomberg, North American Editor, PSD

Date
03/20/2024

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Jason Lomberg, North American Editor, PSD

­Connected vehicles have gradually become the latest battleground in the ongoing Sino-American trade war. Detractors say they pose a threat to national security, but how real is the threat?

The market, itself, is undeniable, expected to eclipse $200 billion by 2027-2028, buoyed by the runaway growth of EVs, AI, and the Internet of Things. We’ve previously covered how EVs are lopping up every available morsel of personal information, from our music preferences to medical data, and as vehicles and electronic devices become ever more intertwined, our privacy becomes a hotter commodity.

And China has definitely utilized consumer brands like Huawei and TikTok as Trojan Horses of a sort, to snag our personal data at the whim of Beijing. But can the same be said for connected vehicles?

President Biden certainly thinks so, recently addressing the “National Security Risks to the U.S. Auto Industry” – “Connected vehicles from China could collect sensitive data about our citizens and our infrastructure and send this data back to the People’s Republic of China. These vehicles could be remotely accessed or disabled.”

Biden mentions how foreign automakers face a litany of restrictions and intense scrutiny in China, so turnabout is fair play. He instructed the Secretary of Commerce investigate connected vehicles with technology from “countries of concern” and take appropriate action.

The Alliance for American Manufacturing has warned about “China’s existential threat to America’s auto industry.”

But just how concerning are these Chinese connected vehicles?

China is the undisputed champion of lithium-ion batteries, producing around 75% of the global supply, and the Shenzhen-based Build Your Dreams recently surpassed Tesla as the world’s top seller of EVs.

But even with BYD opening a plant in Mexico City and expanding into Europe, South America, and Asia, the company has no plans to enter the North American market.

BYD’s executive vice president and CEO of BYD Americas, Stella Li, said as much in a recent interview, affirming that We’re not planning to come to the US.” “It’s an interesting market, but it is very complicated,” she said, alluding to the political turmoil and somewhat volatile nature of the U.S. EV market.

No matter their country of origin, businesses value stability, and the Sino-American trade war (in particular, a 27.5% tariff on car imports from China) is anything but predictable.

BYD’s Li reiterated that their focus is on the local (Mexican) market, and they’re not trying to use America’s southern neighbor to gain backdoor access to the U.S. and circumvent tariffs.

“I think they are a little bit [overreacting],” Li added.

China’s aggressive trade policies are self-evident, but their connected vehicle “threat” could be much ado about nothing.

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