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New Chinese vehicle probe more politics than policy for Biden

New Chinese vehicle probe more politics than policy for Biden

Washington — As the threat of cheaper Chinese cars to the U.S. auto industry intensifies, the Biden administration is moving to open an investigation into the data-collecting capabilities of those vehicles.

Over-the-air software updates, data collection and malware threats in new, highly computerized vehicles are important and underdeveloped areas of U.S. auto regulation, experts said. But the investigation, to be conducted by the Commerce Department, may be more about politics and economic policy disguised as national security. 

Tough-on-China policy likely to take center stage in general-election campaign between Joe Biden and Donald Trump.

“If you want to stop imports of Chinese made vehicles, just do that,” said Sam Abuelsamid, principal e-mobility analyst at market research firm Guidehouse Inc. “Don’t make up excuses.”

Thursday’s announcement came as China, its aggressive industry expansion overseas and the implied threat to auto jobs in the industrial Midwest emerged this week amid campaigning for Michigan’s presidential primary, signaling that the nation’s top auto producing state and the people who engineer and build its metal will be a central battleground in this fall’s race for the White House.

A self-described friend of labor, Biden relied on familiar pro-labor, strong-on-China talking points in announcing the investigation, with some mention of vehicle data collection as a real area of concern.

«China is determined to dominate the future of the auto market, including by using unfair practices,» Biden said in a statement. «China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.»

Trump has similarly vowed to keep Chinese cars out of the U.S. market: «They think they’re going to just sell those cars right over the border, And that’s going to happen, and it will ruin your auto workers in Michigan and other states, by the way. And that’s not going to happen with me,» Trump said this week during an appearance on a WFDF (910 AM) Superstation radio show hosted by conservative commentator Justin Barclay.

The comment came in response to reports that Chinese electric vehicle powerhouse BYD would seek to build a plant in Mexico.

«It’s an election year. I think it’s popular on both sides to really try and find a boogeyman,» Tu Le, founder of Sino Auto Insights, said of the candidates’ comments on China. Political posturing aside, Le added that the U.S. government should focus more on data collection in vehicles of all kinds, regardless of their country of origin.

«I just don’t think the U.S. government and the politicians have any real idea of how that technology works. And they’re not very grounded in kind of the basics of what data is collected, how much data they the tech companies have, what they do with it, how they monetize it, who they target,» he said.

New vehicles generate hundreds of gigabytes and up to full terabytes of data each day, Le said. Some of that is vehicle diagnostic information, though some could be sensitive personal data from phone calls, text messages and navigation routes.

The U.S. government and domestic legacy auto manufacturers are far behind startups and foreign competitors in understanding how to collect and use the information generated by their cars, Le said: “At Tesla and the Chinese EV companies, it’s about 80% software engineers and 20% traditional automotive engineers. At the (Big) Three, and Volkswagen and Mercedes, it’s flip-flopped.» 

He warned that the U.S. government should avoid falling behind on the issue of vehicle data collection as they did with past disruptive technologies. «We can look at U.S. technology companies, who the U.S. government did not get in front of, to illustrate what kind of mess can happen if the assessment is not done,» Le said.

Abuelsamid of Guidehouse, however, said that any serious attempts at regulating this issue would need to target the entire auto industry, rather than Chinese vehicles that remain unavailable to U.S. consumers. «It’s just politics,» he said of the federal investigation.

In a statement, the Chinese Embassy in Washington said the value of vehicles exported from the United States to China is «over three times that of China’s export of cars» to the United States: «However, Chinese automakers’ investment in cars in the U.S. is almost negligible. The so-called national security risk investigation is a clearly discriminatory approach.»

But even so, allies and opponents of Biden in Michigan praised the move.

«The investigation into the national security risks of CVs is important and long overdue,» said U.S. Rep. Tim Walberg, R-Tipton. «Through these vehicles, the Chinese Communist Party can collect copious amounts of data, compromising not only the privacy of Americans but also their safety.»

U.S. Rep. Elissa Slotkin, D-Holly, also praised the move: «This wide-ranging investigation into the security risks of Chinese-made connected vehicles is an important step for U.S. national security and for Michigan’s auto industry.»