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New House bill targets Chinese electric car makers and their connected cars

Chinese electric car makers face a new challenge in their battle for American customers: a new bill in the House of Representatives would restrict or ban the introduction of their internet-connected cars.

The bill, introduced by U.S. Rep. Elissa Slotkin, comes amid an intensifying trade war between the U.S. and China over the Biden administration’s decision to quadruple tariffs on Chinese electric vehicle imports to 100%.

Chinese electric car makers have yet to make significant inroads in the U.S. as they have in Europe. The bill appears to be aimed at curbing manufacturers before they can bring smart, cheap cars to the U.S. market.

Slotkin, a former CIA analyst and Pentagon official, has repeatedly warned Congress about the threat posed by Chinese-made connected cars. In a speech to the House of Representatives earlier this month, Slotkin outlined how the Chinese government heavily subsidizes its auto industry to sell advanced, low-cost electric vehicles equipped with sensors such as lidar, radar and cameras that can collect data and transmit it back to Chinese authorities.

“If allowed access to the U.S. market, China’s connected cars would provide the Chinese government with a wealth of valuable intelligence about the United States, including the ability to gather information about critical infrastructure like our military bases, power grids, and transportation systems, and potentially even locate specific U.S. leaders if they so choose,” Slotkin said in a statement released Wednesday. “China has a rapidly growing share of the connected car market in Europe and Mexico, so now is the time to ensure we improve our defenses before these cars enter the U.S. market.”

Last week, provisions championed by Slotkin — such as a ban on U.S. military bases using Chinese connected cars and a ban on the Department of Defense purchasing Chinese-made lidar — were written into the U.S. government’s annual defense spending bill.

Slotkin’s bill, called the Connected Car National Security Review Act, would review not only electric vehicles but also self-driving cars if passed. Many self-driving car companies with Chinese ties, such as WeRide and Pony.ai, have valid permits to test in California. Alphabet’s Waymo has also reached an agreement with Chinese startup Zeekr to produce dedicated robotaxis.

Waymo has not yet responded to TechCrunch’s request for comment on the bill.

How will the bill affect Chinese electric vehicles?

As far as electric vehicles go, Volvo and Polestar both have operations in the U.S. Both companies are owned by China’s Geely Automobile. Volvo assembles most of its cars in Sweden, while the next generation of Volvo cars for the North American market will be built at a newly opened plant in Ridgeville, South Carolina.

A Polestar spokesperson assured TechCrunch that it does not share personal data of North American and European customers with China, and that since the automaker is headquartered in Sweden, it must comply with GDPR laws.

In any case, the bill would not exempt friendly countries or domestically produced cars from scrutiny. If passed, the bill would give the Commerce Department the power to review the sale, import or other transactions of any connected car “designed, manufactured or supplied” by a company with ties to China or a country of concern.

The bill goes a step further by using traditional trade restrictions, such as tariffs, to potentially ban connected cars made by Chinese companies in countries such as Mexico from entering the U.S. That could target automakers such as BYD Co., which Chief Executive Stella Li said in February was scouting for factories in Mexico.

The bill would also give the Commerce Department and other federal agencies clear legal authority to strengthen national security protections and prevent future administrations from removing them, a move Slotkin said was not hypothetical.

Slotkin noted that then-President Donald Trump’s order would give the U.S. the power to address security risks of the social media platform TikTok, which is owned by the Chinese company ByteDance. In April, President Biden signed a bill that would ban TikTok unless ByteDance sold the app. Trump, who is running for re-election in November, has since reversed his previous stance and even opposed efforts to force a sale.

Tesla is reportedly trying to take advantage of growing U.S. concerns about China’s data power as Beijing relaxes rules regulating cross-border data flows by getting permission to send its connected car data back to the U.S. to train Tesla’s “full self-driving” algorithms.

Slotkin’s bill comes as the U.S. Commerce Department pledged to rule on China’s connected cars later this year, following the Biden administration’s February launch of an investigation into the national security risks of such vehicles.

Slotkin plans to introduce the bill when Congress resumes on June 3 after the Memorial Day recess.

This article has been updated to include Polestar’s comment. This article was originally published at 8:55 a.m. PT.

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