The US Bureau of Industry and Security recently finalised its rules on “connected vehicle supply chains”. These final rulings prohibit the sale or import of connected vehicles, and specific hardware or software from companies with significant links to China or Russia.
The US Secretary of Commerce, Gina Raimondo commented that these rules “safeguard US national security… by keeping foreign adversaries from manipulating these technologies to access sensitive or personal information”.

A timeline for banning Chinese technology
This ruling builds upon an initial proposal released in September 2024, which aimed to ban Chinese software and hardware in US vehicles. It also follows the US imposing 100% tariffs on Chinese made EVs in May 2024.
The restrictions on software will take effect beginning with Model Year 2027, while hardware-related bans will apply to Model Year 2030 vehicles or those manufactured after January 1, 2029, if they lack a designated model year. Additionally, the sale of connected vehicles by manufacturers with significant ties to China or Russia will be prohibited from Model Year 2027, even if production occurs within the US.
Currently, the rules are limited to passenger vehicles (under 10,001 lbs), allowing BYD to continue operating its electric bus assembly facility in California for now. However, it is anticipated that the incoming Trump administration will expand these restrictions to include commercial vehicles as well.
The rulings also ban Chinese companies testing autonomous vehicles on US roads.
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What effect will this have on the EV market?
There are already very few Chinese EV automakers operating in the US. However, there are a few notable players Polestar, Zeekr and Volvo, all subsidiaries of Chinese automaker Geely. Polestar has been selling vehicles in the country since 2020, while Zeekr has been in partnership with Waymo, Google’s autonomous driving unit, since 2021. For Volvo North America is its second largest EV market after Europe. It remains unclear immediately how these rules will these companies.
The rulings will have a big effect on the growing autonomous vehicle market
Over the past year, Chinese autonomous driving software and hardware companies have increasingly set their sights on the US. Notable players like Baidu’s Apollo Autonomous Driving, Pony AI, and WeRide, all Chinese firms, currently hold permits to test autonomous vehicles in the region. However, the ruling threatens to block these companies from operating in the US.
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Similarly, other companies such as Robosense, a software developer, and Hesai Technology, a LIDAR producer, have established bases in the US with ambitions to expand their operations. These new restrictions, however, will hinder their growth and activities in the region.
As the future of the EV market moves toward greater autonomy and intelligence, this ruling further solidifies divisions that have been emerging in the global vehicle market over the past few years.
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