By David Shepardson
WASHINGTON (Reuters) -The Commerce Department said on Friday that U.S. auto sales could fall by up to 25,841 vehicles a year and prices could rise if proposed rules go ahead that would ban Chinese vehicles that connect to the internet and key Chinese software and hardware would ban.
U.S. automakers and others selling in the United States “may be less competitive in the global marketplace due to the relatively higher prices of their vehicles,” the department said. It was estimated that between 1,680 and 25,841 fewer vehicles would be sold annually as a result of the rule.
To reduce national security vulnerabilities that could be exploited by China, the department estimated that the rule could block $1.5 billion to $2.3 billion in vehicle inputs from Chinese or Russian companies for vehicles sold in the United States sold.
It previously said the proposal would amount to an effective ban on Chinese vehicles as they would all have internet-connected vehicle software and hardware, but it has proposed a process for companies to apply for exemptions.
The Commerce Department proposes that the software ban would take effect in model year 2027, while the hardware ban would take effect in model year 2030 or January 2029. The public has 30 days to comment before the rules can be finalized.
The Commerce Department said the main benefit of the rules would be “a reduction in the likelihood of a catastrophic attack resulting from data leakage and remote tampering of connected vehicles.”
This week, the department said General Motors and Ford Motor would have to stop importing vehicles from China to the US under the rule.
GM sells the Buick Envision and Ford sells the Lincoln Nautilus – both assembled in China – in the US market. In the first half of 2024, GM sold approximately 22,000 Envisions and Ford 17,500 Nautilus in the US.
(Reporting by David Shepardson; Editing by Cynthia Osterman)
