The Biden administration’s proposed embargo on Chinese connected-car technology could be its most powerful weapon yet against a wave of low-cost Chinese electric vehicles that have upended the global auto sector.
The US Commerce Department’s announcement on Monday of a prohibition on hardware and software is the administration’s latest salvo after imposing 100% tariffs on Chinese EVs and rejecting a $7,500 consumer EV subsidy for any vehicle containing Chinese-made components.
According to a Reuters story, unlike those regulations, the connected-car tech prohibition would apply to automobiles made by Chinese enterprises outside of China, such as in Mexico or Europe, where facilities are planned.
“It’s a powerful statement,” said Michael Dunne, a consultant who monitors the Chinese auto industry. After slapping heavy tariffs, he claimed, US authorities “looked at it again and said: ‘Is that going to be enough?'” And they concluded, “Probably not.”
BYD, the Chinese EV market leader, has announced plans to build a plant in Mexico. While the factory has stated that it will exclusively service the local market, US trade groups are concerned that Chinese EVs could result in a “extinction-level event” for US automakers.
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