Chinese Tech In Cars Now A Security Threat? Biden Says 'Not Going To Let That Happen On My Watch' As US Starts Probe

The White House on Thursday said that the United States has initiated an investigation into connected vehicles with technology from “countries of concern” including China in a bid to ensure national security.

What Happened: President Joe Biden in a statement noted that the connected cars from China could collect sensitive data which it could send back to China. These vehicles could even be remotely accessed or disabled thereby mandating the investigation, he said. The Secretary of Commerce will take action to respond to any risks identified, he added.

“China is determined to dominate the future of the auto market, including by using unfair practices.  China's policies could flood our market with its vehicles, posing risks to our national security,” Biden said. “I'm not going to let that happen on my watch.”

The President further vowed actions to protect the domestic auto industry and its workers. However, he did not provide further details on these actions.

Why It Matters: Chinese automakers presently do not have a significant market in the U.S., partly due to the high tariffs imposed on vehicle imports from China.

However, major U.S. automakers have been flagging concerns about Chinese EV makers entering the domestic market via neighboring countries like Mexico in a bid to evade the high tariffs. The Alliance for American Manufacturing (AAM), which includes several major automakers, even said last week that allowing Chinese EV makers into the American marketplace could be a possible "extinction-level event" for the U.S. auto sector.

Chinese EVs and parts are subsidized to be extremely cheap as compared to U.S. EVs and will threaten the domestic EV-making industry, the AAM said. "The commercial backdoor left open to Chinese auto imports should be shut before it causes mass plant closures and job losses in the United States," it warned.

The group called upon the government to raise tariffs further for made-in-China vehicles, a policy to prevent the entry of Chinese EV makers into the U.S. via neighboring states like Mexico, and the further implementation of the Uyghur Forced Labor Prevention Act to keep goods produced in Xinjiang out of the U.S. market.

The fears have escalated since reports of Chinese EV giant BYD Co Ltd eyeing a factory in Mexico. In the last quarter of 2023, BYD took over Tesla in battery electric vehicle (BEV) sales by selling 526,000 BEVs, surpassing Tesla's global delivery count of 485,000. But unlike Tesla which sells only BEVs, BYD also makes hybrids.

However, in an interview earlier this week, BYD Executive Vice President Stella Li said that the company is not looking to play in the U.S. just yet, citing complications including politics.

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