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Joe Biden has ordered an investigation into whether Chinese “connected” vehicles, including electric cars, pose a security risk to Americans, as he tries to prevent China from flooding the US market.
The US president directed his commerce department to determine what measures his administration should take to prevent China from undermining national security through the export of “connected” vehicles. He said the “unprecedented” move was designed to ensure America maintained what he said was its “dynamic auto industry”.
“China is determined to dominate the future of the auto market, including by using unfair practices,” Biden said as he announced the investigation on Thursday. “China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.”
Biden said most cars were now “connected”, making them “like smartphones on wheels”. He said he was concerned Chinese vehicles could collect sensitive data about US citizens and infrastructure, and that the information could be sent back to China and enable its government to remotely access the vehicles.
“China imposes restrictions on American autos and other foreign autos operating in China,” Biden added. “Why should connected vehicles from China be allowed to operate in our country without safeguards?”
US commerce secretary Gina Raimondo said “connected” cars were able to collect huge amounts of sensitive data, from driving routes to biometric information. “It doesn’t take a lot of imagination to figure out how a foreign adversary like China with access to this sort of information at scale could pose a serious risk for national security and the privacy of US citizens,” she said.
Raimondo said the US was taking action “before Chinese manufactured vehicles become widespread in the United States”. White House national economic adviser Lael Brainard noted China had imposed restrictions that prevented connected vehicles from operating in China unless those cars used only Chinese software and only provided data gathered to Chinese groups.
While the officials stressed the security implications, Washington is also concerned about China’s industrial overcapacity and the possibility that Chinese groups could dump products, including electric vehicles, on international markets.
US Treasury officials recently told the Financial Times that EVs were one of the areas where the Biden administration was most concerned about the possibility of China flooding the US and other markets.
“This particular inquiry is motivated by the national security risk . . . though it fits into a broader strategy for making sure that we are supporting a strong US auto industry,” said one official.
The move comes as Biden campaigns for re-election against his likely opponent Donald Trump, who made China-related trade issues a huge part of his first presidential campaign in 2016.
US officials said it was too early to determine what, if any, impact the investigation would have on Tesla, an American company that manufactures EVs in China. Nearly one-third of EVs exported from China last year were Tesla cars produced at its factory in Shanghai.
In China, Tesla owners have faced security-related restrictions, including bans from parking their vehicles inside some military compounds in Beijing over fears that the cars’ built-in cameras pose a risk.
Military personnel and employees of some sensitive government agencies and state-owned enterprises have reportedly been barred from driving Teslas to work. Elon Musk, Tesla’s chief executive, has denied that the cameras could be used for spying.
One official said the US commerce department had the authority to impose a range of measures, such as barring transactions or requiring mitigation actions, although that did not include tariffs. Some experts are waiting to see if Biden will restructure the tariffs that then-president Trump slapped on imports from China in a way that would make it harder for the Asian country to sell EVs in the US.
Another official said Washington was in “no way committed to a ban of Chinese electric vehicles” and said the investigation was focused on the technology present in vehicles rather than the actual cars.
The move marks the latest US effort to counter what it views as security threats from China. The Biden administration has introduced sweeping export controls to make it harder for Chinese groups to obtain cutting-edge US technology with military applications in sectors ranging from artificial intelligence to quantum computing.
This week, Biden issued an executive order designed to make it harder for China and other adversaries, including Russia, to obtain sensitive personal data on US citizens.
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