Automakers urge Congress to quickly pass law banning Chinese cars

A trade association representing major automobile companies has urged lawmakers to enact legislation permanently prohibiting Chinese vehicles, software, and hardware from entering the United States market by the end of the year. The Alliance for Automotive Innovation, which includes General Motors, Ford, Toyota, Volkswagen, Hyundai, Honda, and Stellantis, among others, sent a letter to Congress expressing their concern.

The group's CEO, John Bozzella, argued that Chinese automakers are currently flooding the global market with subsidized vehicles equipped with connected technology. While this has not yet occurred in the US, the group emphasized the urgency of the threat and requested swift action from lawmakers. In July, the Senate Commerce Committee approved a bill to tighten restrictions on Chinese automakers entering the American market, but it still faces challenges to pass.

Bozzella stated that passing the bill would send a clear message to China that the American government is taking a firm stance against its strategy to dominate global automotive manufacturing. The Chinese embassy in Washington opposed the bill, citing that Beijing has eliminated market access restrictions on foreign investment in manufacturing and remains open to collaborating with international automakers.

Tesla, Buick, Toyota, and Ford have all been well-known brands in China. In July, the Alliance had also urged lawmakers to explicitly prohibit the Commerce Department from granting specific authorizations to Chinese automakers, such as BYD, Chery, and SAIC Motor, who receive subsidies from the Chinese Communist Party to manufacture, sell, or import connected vehicles to the US.

Republican Senator Bernie Moreno and Democratic Senator Elissa Slotkin proposed legislation to codify the Biden administration's existing regulation that effectively bans Chinese automakers from selling or building passenger vehicles in the US, as well as other measures to prevent China's entry into the US light-duty market. However, a provision in the bill that would ban companies with over 15% ownership by Chinese entities would prevent Mercedes-Benz from selling vehicles in the United States due to its nearly 20% passive investment from China.

Senator Ted Cruz, the committee chair, stated that the bill requires amendments before it can become law. In June, Polestar announced that the Trump administration had forced the electric-vehicle manufacturer to cease selling vehicles in the U.S starting from the 2027 model year, as the company is majority-owned by China's Geely Holding.

The regulation, based on national security concerns, covers Bluetooth, Wi-Fi, cellular connectivity, and certain satellite communications technologies due to the ability of vehicles to collect sensitive data on American owners.