Ford Backed Group Criticizes Proposed Chinese Vehicle Ban

The Ford-backed lobby group Alliance for Automotive Innovation (AAI) has been a supporter of the Biden Administration’s move to increase tariffs on imported Chinese vehicles and other materials since the day that plan was announced, citing that country’s 15-year head start on electrification, moves to corner the market on the global EV supply chain, and the fact that automakers in that country have an overcapacity problem stemming from heavily subsidized EVs, which is prompting them to “dump” those vehicles in other markets. However, some additional actions that were just announced yesterday aren’t sitting quite as favorably with the lobby group.

The U.S. Commerce Department just announced a series of newly proposed rules that would prohibit the use of “key” Chinese software and hardware in connected vehicles on American roads, which would effectively ban all of those types of vehicles from the U.S. However, this proposed rule would also require U.S. automakers to remove that same hardware and software from their vehicles in the coming years, with software restrictions beginning in 2027, followed by a hardware ban in January 2029 for the 2030 model year.

Trouble is, automakers including Ford and General Motors currently produce select vehicles in China and then export them into the U.S. – including the the all-new 2024 Lincoln Nautilus, which is built at the Changan Ford Hangzhou Assembly plant. If these rules do indeed become law, automakers would reportedly be banned from exporting vehicles from China to the U.S. entirely, which didn’t sit terribly well with AAI, which has now related a statement on the matter.

“The purpose of this rule is to ensure the information and communications technology and services systems in connected vehicles bypass suppliers from China and other countries of concern. That’s a national security goal automakers share with policymakers,” said John Bozzella, president and CEO of Alliance for Automotive Innovation. “Important context: there’s actually very little technology – hardware or software – in today’s connected vehicle supply chain that enters the U.S. from China. But this rule will require auto manufacturers in some cases to find alternate suppliers.”

“I’ve said this in other contexts, but it applies here too: you can’t just flip a switch and change the world’s most complex supply chain overnight. It takes time. (See: China and battery critical minerals). The lead time included in the proposed rule will allow some auto manufacturers to make the required transition but may be too short for others. This was a thoughtful, thorough, and consultative process by the Bureau of Industry and Security. We’ll provide additional perspective as they develop a final rule that reflects industry realities and achieves our shared national security goals.”