U.S. Auto Industry Accelerates Removal of Chinese Connected Hardware
Taylor Wilson
U.S. federal rules ban Chinese connected software from model-year 2027 and Chinese connected hardware from model-year 2030, forcing automakers to start replacing suppliers now — compliance costs and alternative capacity are the industry's central variables.
What exactly does this ban cover?
The Biden administration formalized the rule in January 2025, citing national security and data privacy. The Trump administration has continued enforcement.
Two deadlines: MY 2027 — no Chinese connected software; MY 2030 — no Chinese connected hardware.
This means → automakers typically lock in suppliers years ahead, so the window to find replacements is already open, not something that starts in 2030.
Polestar was banned — what signal does that send?
Last month, Geely-owned EV brand Polestar was barred from selling new cars in the U.S. for violating the rule.
In plain terms = this is not a future risk — it is a penalty already enforced, making Polestar the first brand blocked from the U.S. market under this regulation.
This reflects an enforcement intensity that exceeded many manufacturers' expectations. Industry-wide compliance vigilance has risen sharply.
Who is filling the gap left by Chinese suppliers?
Ohio-based Eagle Wireless, founded in late 2025, was set up specifically to address this regulatory gap. It is one of a handful of U.S.-based connected-module suppliers.
The company started with about 140 employees and plans to grow to 1,000 within three years. Revenue this year is expected to nearly double to close to $100 million.
But a cost gap remains: Eagle Wireless acknowledges its modules run 5–15% more expensive than Chinese rivals. A former Detroit auto executive, comparing non-Chinese autonomous-driving systems with Chinese alternatives including lidar, said: "My jaw dropped when I saw the price difference."
Which hardware is hit first?
The most affected components are satellite communication systems, external antennas, and other microcontrollers (MCUs) that enable a vehicle's outbound communications — according to Matt Wyckhouse, CEO of security firm Finite State and an Eagle Wireless adviser.
Advanced driver-assistance system (ADAS) components — parts that handle automatic braking, lane-keeping, and similar functions — are not yet covered by the connected-vehicle rule.
But the U.S. government has warned it may address ADAS separately in the future. This means → the boundary of the supply-chain cleanup could still widen.
How are automakers responding?
Hilary Cain, senior VP at the Alliance for Automotive Innovation, says the rule "requires deep supply-chain audits" — automakers are pressing suppliers for greater visibility to ensure no banned Chinese components are embedded.
EV maker Rivian believes it is better positioned than some legacy automakers: it can switch suppliers or source parts directly with greater agility. Its software lead says he is "very careful" in choosing suppliers and "usually has a backup plan" for geopolitical risk.
Others are seeking exemptions: Ford has applied for authorization to keep importing certain China-made models; Geely-owned Volvo Cars was among the first automakers to receive authorization. In plain terms = the trade-off between compliance costs and exemption paths will determine who pays more and who takes fewer detours in this round of supply-chain restructuring.
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