National Security Risks Prompt Biden Admin Investigation of Chinese Smart Cars

by | Mar 7, 2024

Chinese smart cars pose a variety of potential national security risks, according to the Biden administration, and a new executive order directs a number of federal agencies to address the issue.

The administration has expressed concern about Chinese smart cars being used as tools of international espionage, echoing China’s own moves to restrict Tesla vehicles from certain sensitive areas. The recent discovery of hackers lurking in critical infrastructure also appears to have rattled the highest levels of government, raising concerns that a mass remote shutdown of electric vehicles could be used to cause destruction. But the primary focus appears to be the reams of personal data that these vehicles vacuum up, and the fact that existing federal regulations do little to stop this from happening.

Chinese smart cars gather mountains of data, but are not unique in this

The fears about how Chinese smart cars could spy on Americans are tied to the mountains of data that domestic automakers are already collecting from their customers, often without drivers being aware of what they’re sharing. The specific concern for the administration here is that a Chinese company sending this data back to servers overseas is essentially making it all freely available to the Chinese government.

In lieu of federal data privacy regulation, which would take the action of a Congress that continues to seem mostly uninterested in the issue, the executive order is looking to at least cut off national security risks before they can develop. Chinese smart cars are not presently a significant part of the US auto market, due mostly to import tariffs and their ineligibility for large tax credits that otherwise go to EVs. That situation is expected to change in the near future as Chinese manufacturers establish plants in Mexico, and evidence from other regions (such as the EU and Mexico itself) points to them very quickly taking significant market share once their products become widely available.

National security risks are not an exaggeration

The national security risks of the situation are real, and one need look no further than China’s own government for confirmation. In recent years it has been gradually restricting Tesla vehicles from more and more roads and parking lots, primarily out of concern that the recording devices in the cars could be harnessed as spy tools by rival nations.

Commerce Secretary Gina Raimondo has called Chinese smart cars “smartphones on wheels,” though that description accurately applies to all vehicles of this type. The Commerce Department is one of the agencies taking a lead role in addressing national security risks that might arise on the roads, though their role would appear to be focused more specifically on data privacy than in the use of Chinese smart cars for some sort of physical attacks.

The situation is somewhat similar to the ongoing TikTok regulation saga, which the Commerce Department has been at the center of since 2020. The most recent development was a letter from lawmakers to the agency urging ByteDance’s addition to the “Entity List” in early February, after Raimondo said late last year that the app poses national security risks. However, the Commerce Department has been urged by Congress to act independently on TikTok after the Biden administration seemingly stalled on restricting it, while the administration appears to be much more proactive about Chinese smart cars.

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