Australia monitors US ban on Chinese car software over security fears

The Albanese government says it is closely watching a move by the US to ban the use of Chinese software and hardware in smart vehicles due to national security concerns.

The US Commerce Department is expected to announce the proposed ban on Monday (US time), citing concerns about the potential for Chinese companies to access and track the data of American drivers, and potentially manipulate their vehicles through the cars’ communications systems and automated driving software.

The Biden administration is expected to announce a ban on the use of Chinese software and hardware in new vehicles due to national security concerns. Credit: Bloomberg

The Department of Home Affairs said it had been closely monitoring the US developments on the matter, saying in a statement it “has been proactively engaging with the US government to understand the implications of any proposed regulation”. However, the department did not elaborate on whether the Australian government would consider taking similar steps.

The US decision follows a months-long investigation by the department, ordered by President Joe Biden, and warnings from Commerce Secretary Gina Raimondo about the risks of Chinese-made connected-car technology, including that data could be shared with Beijing and used to disable cars remotely.

“You can imagine the most catastrophic outcome theoretically if you had a couple million cars on the road and the software were disabled,” Raimondo said in May.

It also represents a major escalation of the US’s crackdown on China’s booming auto industry, after the Biden administration slapped 100 per cent tariffs on Chinese-imported EVs in May. But whereas that decision was a trade protectionist policy designed to shield American car manufacturers from an influx of cheap Chinese alternatives, this proposed ban is grounded in national security concerns about nefarious interference by foreign state actors.

The ban is expected to extend to Russian-made car technology where the same concerns apply.

Opposition home affairs spokesman James Paterson said the Albanese government needed to outline the steps they were taking to address the risks.

“It’s hard to see how it is in our national interest for companies headquartered in an authoritarian state to become the dominant supplier of vehicles in Australia and retain access to the enormous amounts of data they collect,” Paterson said.

“It’s time for our Cybersecurity Minister Tony Burke to step up and outline what action the government will take or why he thinks it’s not a problem even though our closest allies do.”

Reuters has reported that the new US regulations will prohibit the import and sale of vehicles from China with certain Bluetooth, satellite and wireless features as well as highly autonomous vehicles that could operate without a driver behind the wheel. The ban on the software is expected to take effect in the 2027 model year and the hardware ban would take effect in January 2029 or the 2030 model year.

The Chinese government has previously rejected US concerns about the security risks of Chinese-made connected-car technology as a “false narrative” and maintained it does not ask companies to collect private data in other countries in violation of local laws.

The Australian government has not followed the US and the EU in imposing tariffs on Chinese-made EVs as it has looked to encourage their uptake in line with its 2030 climate target of cutting emissions by 43 per cent from 2005 levels.

China is now the third-biggest supplier of new cars to the Australian market and about 80 per cent of EVs sold in Australia, including Tesla models, are manufactured in China.

New vehicles are now routinely manufactured as “smart” cars with internet-enabled hardware that allows them to connect to, and share data with, devices inside and outside the vehicle.

The US and its allies have become increasingly concerned about Chinese state-sponsored cyber actors. This year, officials of the Five Eyes intelligence alliance, which includes Australia, jointly sounded the alarm about a Chinese hacking network known as Volt Typhoon that was discovered prepositioning inside critical infrastructure networks with the aim of launching destructive attacks.

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