Automakers Push Congress for Permanent Chinese Vehicle Ban, Warning The Cars Pose a Security Threat

The Alliance for Automotive Innovation is calling on Congress to permanently prohibit the sale, import and domestic production of connected vehicles, software and hardware linked to China, arguing that lawmakers should act while Chinese automakers still have a limited presence in the U.S. market.

In a letter sent to congressional leaders on Thursday, the trade group urged lawmakers to establish permanent restrictions before the current session of Congress concludes on January 3.

The Alliance represents the overwhelming majority of automakers selling vehicles in the United States, putting significant industry weight behind an issue that has increasingly brought together concerns over trade, manufacturing and national security.

Alliance CEO John Bozzella pointed to the rapid international expansion of Chinese manufacturers as evidence that the U.S. should establish stronger defenses now. "Right now, Chinese automakers are dumping subsidized vehicles with connected software and hardware around the world," Bozzella wrote in the letter.

While that wave of Chinese vehicles has not reached the United States, Bozzella argued that Congress should not wait for it to happen. "This hasn't happened inside the U.S. yet, but given the scale and urgency of this threat, we urge you to enact a Chinese vehicle, software and hardware ban before adjourning this year and make this policy the law of the land," he said.

Timing could become an obstacle as November's midterm elections are approaching, potentially leaving lawmakers with a narrower window to resolve major legislation before the congressional session ends.

There is already bipartisan interest in tightening restrictions on Chinese involvement in the auto industry. But determining exactly what constitutes a Chinese-connected vehicle could prove complicated. Legislation advanced by the Senate Commerce Committee could potentially affect Mercedes-Benz because Chinese investors own nearly 20% of the German automaker.

That possibility puts the Alliance in an unusual position. Mercedes-Benz is one of its members, even as the organization supports broader action against Chinese vehicles and technology.

The group therefore is asking lawmakers to draw the rules carefully. It said it hopes to work with Congress to "achieve a balanced policy so all our member companies continue to succeed and thrive inside the U.S."

Behind the legislative fight is a much larger transformation of the global automobile business. Chinese manufacturers such as BYD and Geely have dramatically expanded beyond their domestic market, particularly as China has emerged as a powerhouse in electric vehicles and battery production. Their cars are increasingly competing for buyers in Europe, Central America and South America.

American automakers fear a similar expansion into the United States could eventually put pressure on domestic manufacturers and prices. But the argument in Washington is no longer exclusively about protecting U.S. factories from cheaper foreign competition.

Today's vehicles function increasingly like computers on wheels, relying on sophisticated software, sensors, cameras and internet connectivity. That has raised concerns about the information vehicles collect, where that data could be transmitted, and whether technology controlled by companies with ties to China could create security vulnerabilities.

The auto industry is now asking Congress to address those risks before Chinese manufacturers become established players in the U.S. Bozzella argued that permanent legislation would also send a broader geopolitical signal.

"Enacting a permanent ban on Chinese vehicles and high-risk hardware and software in the 119th Congress will send a clear and bipartisan message that China's strategy to dominate global automotive manufacturing will be met with a national security policy response from the American government," he wrote.