Proposed ban on Chinese vehicle tech is latest punch in EV import crackdown

• China is exporting lots of low-priced EVs around the world, a fact American automakers have long viewed as an existential threat.

Driving the news: The Commerce Department today proposed the creation of a rule that would prohibit the import or sale of any software and hardware used in connected and autonomous vehicles from China and Russia.

• The headline reason behind it is national security. Connected vehicles by definition require connecting to the outside world, creating risks if those systems are controlled by adversaries, the administration says.

This isn't a "now" problem, however.

• "There's actually very little technology — hardware or software — in today's connected vehicle supply chain that enters the U.S. from China," according to a statement from John Bozzella, CEO of the trade group Alliance for Automotive Innovation.
• And Chinese-branded cars aren't even for sale in the U.S. yet.

Our thought bubble: The key here is that this could block BYD, the world's largest EV maker, and other Chinese automakers from hitting U.S. roads.

• For big legacy automakers like Ford and General Motors, budget-priced Chinese cars would represent a seismic disruption.

What's next: Today's proposed rule would require a small number of auto manufacturers to find alternate suppliers for U.S. vehicles, and they'd have until 2027 to do it.