WASHINGTON, D.C. (Michigan News Source) — As the Biden administration prepares to impose stricter regulations on Chinese automotive technology, Michigan’s auto industry stands at a significant juncture. The forthcoming measures aim to safeguard national security and protect the domestic auto sector from foreign competition and potential espionage.

The Biden administration announced plans to unveil new regulations this fall, targeting internet-connected vehicles from China. These vehicles, commonly described as “smartphones on wheels,” pose risks due to their sophisticated sensors and software, often controlled by Beijing.

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Commerce Secretary Gina Raimondo highlighted the stakes, explaining how these vehicles are equipped with sensors and chips that can track driver behavior and conversations: As reported in The Detroit News, “They know where the driver goes, what the driving patterns are, what you’re saying in your car.”

This update comes in the wake of the U.S. Department of Commerce’s investigation into these vehicles announced in late February, and follows the recent imposition of new tariffs on Chinese automotive goods. Specifically, on May 14, Biden announced new tariffs on $18 billion worth of Chinese imports, including a substantial increase in tariffs on electric vehicles from 25% to 100%, as well as higher tariffs on semiconductors, batteries, and solar panels​. 

These developments, however, could significantly impact Michigan, home to Detroit’s Big Three automakers. 

While the regulations aim to protect local companies from unfair competition and data security threats, they also present challenges due to the global integration of the auto industry. Many advanced vehicle systems rely on international components, including Chinese-made sensors essential for autonomous driving and electric vehicles.

The Alliance for Automotive Innovations, representing most U.S. automakers except Tesla, expressed cautious support for the investigation. In a public comment, the alliance emphasized the need for a balanced approach: “We share the goals of the [investigation] and appreciate the essential role that [the Commerce Department’s Bureau of Information and Security] has in ensuring that the national and economic security of the United States is preserved. At the same time, modern vehicles are incredibly sophisticated and incorporate increasingly advanced technologies that are constantly improving and evolving.”

The Chamber of Progress, an advocacy group for mobility startups like Lyft and Waymo, warned in a public comment that domestic manufacturing of components like LiDAR sensors (Light Detection and Ranging) is not yet sufficient to meet demand. “US AV (autonomous vehicle) operators rely on foreign-produced LiDAR sensors, particularly from China, because they are cheaper and higher quality than those produced in the US. Without rapid developments in US LiDAR manufacturing capability, limitations on transactions with China for LiDAR sensors would significantly limit development and deployment of AVs within the United States,” the organization said. 

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Rep. Elissa Slotkin (D-Holly), a former CIA officer, highlighted the potential dangers of Chinese-connected vehicles near national assets, such as military bases and power plants. “Imagine a fleet of Chinese-connected vehicles driving around the United States, driving around our military bases, driving in and around our major infrastructure sites,” she said. “To me, that just poses a real national security threat” (The Detroit News). 

As the Biden administration moves forward with new restrictions, Michigan faces the challenge of balancing national security with economic growth. Given its rich automotive heritage and strategic role in the industry, Michigan’s response to these restrictions will likely influence the broader U.S. auto sector.