Biden Administration's Final Rule on Connected Vehicles and Robotaxi Testing

The U.S. Department of Commerce has introduced a final rule that bans the sale or import of connected cars from China and Russia. This decision is driven by concerns over national security. Additionally, Chinese companies involved in self-driving technology, such as WeRide and Pony AI, will no longer be permitted to test their autonomous vehicles on U.S. roads.

In a statement, National Economic Advisor Lael Brainard emphasized that China aims to control the future of the automotive industry. She pointed out that connected vehicles with systems linked to foreign adversaries could pose risks of data misuse and malicious interference. This ruling is intended to create a more secure auto industry in America.

The rules regarding software will come into effect for the 2027 model year, while hardware restrictions will start in 2029. The Department clarified that Chinese software developed before the new regulations would not fall under the ban, as long as access remains exclusive to non-Chinese entities.

There is a provision that allows vehicles heavier than 10,000 pounds to bypass these restrictions, meaning that companies like BYD can continue to manufacture electric buses in California.

Currently, several Chinese autonomous vehicle companies hold permits to test their vehicles in California. For instance, Baidu-owned Apollo Autonomous Driving and WeRide have permits for testing without safety drivers. Meanwhile, Pony AI has permission for testing with a safety driver. In its initial public offering materials, Pony AI acknowledged a potential risk of halting its limited robotaxi testing operations in the U.S. due to the upcoming ban. They highlighted that these operations accounted for less than 1% of their total revenue for the first half of 2024.

A representative from the California Department of Motor Vehicles indicated that the agency would comply with the Commerce Department’s directives in enforcing these new rules. It remains to be seen whether the DMV will revoke the existing testing permits following the announcement of the final ruling.

Biden, Vehicles, Ban