The Cars

No Chinese-branded passenger vehicle is currently sold in the United States at commercial scale. BYD, SAIC, Geely, and Chery have all studied U.S. market entry and, in some cases, made public statements about intent. None has executed. The primary barrier is not regulatory — it is tariff. The Biden administration raised tariffs on Chinese-made EVs from 25% to 100% in 2024, making direct import from Chinese factories economically unviable at competitive price points.

The tariff wall has redirected Chinese automaker strategy toward third-country manufacturing. BYD has announced or broken ground on assembly plants in Mexico, Hungary, Brazil, Thailand, and Turkey. A Mexican facility would, in principle, qualify for USMCA tariff treatment — potentially allowing Chinese-branded vehicles assembled in Mexico to enter the U.S. market at the standard 2.5% passenger vehicle tariff rate. The Commerce Department and USTR have been examining whether USMCA rules-of-origin requirements would in practice prevent this outcome.

Geely's position in the U.S. market is more complex. Geely owns Volvo Cars, which manufactures vehicles in South Carolina. It owns a 9.7% stake in Mercedes-Benz. It owns Polestar, which sells EVs in the United States assembled in South Carolina and China. Polestar vehicles assembled in China face the 100% EV tariff; those assembled in South Carolina do not. The Geely ownership chain runs through a Swedish holding company, but the ultimate beneficial owner is Chinese national Li Shufu.

Contemporary Amperex Technology Co. Limited (CATL) is the world's largest EV battery manufacturer, holding approximately 37% of global market share. CATL does not currently manufacture batteries in the United States. It supplies battery cells to Ford, BMW, Tesla (for non-U.S. markets), and dozens of other automakers globally. Ford's BlueOval SK joint venture with SK On produces batteries in Tennessee and Kentucky; those facilities do not use CATL technology.

The IRA's Foreign Entity of Concern (FEOC) provisions, which took effect for battery components in 2024 and for critical minerals in 2025, prohibit EV tax credits for vehicles whose batteries contain components or materials sourced from FEOC-designated entities. CATL is not itself FEOC-designated, but its status has been the subject of ongoing review. Chinese companies with more than 25% Chinese government ownership, or operating under Chinese government direction, meet the FEOC threshold.

CATL's proposed licensing arrangement with Ford for a Michigan LFP battery plant — in which Ford would own the facility and pay CATL a technology licensing fee — was restructured and ultimately scaled back following congressional pressure. The episode illustrated the difficulty of separating Chinese battery technology from nominally American manufacturing. CATL has since pursued similar licensing structures with other non-U.S. partners in Europe and Canada.

Chinese suppliers hold significant positions in EV components beyond battery cells. BYD's subsidiary FinDreams Battery supplies battery packs to Toyota. BYD also manufactures electric motors, power electronics, and IGBT chips used in its own vehicles and sold to third-party automakers. Ningbo Joyson Electronic, which acquired Key Safety Systems (a major U.S. airbag and seatbelt supplier) in 2016, supplies safety systems to Ford, GM, BMW, and others. Yanfeng Automotive Interiors, a SAIC joint venture, is one of the largest automotive interior suppliers in North America.

The component exposure is not limited to EVs. Chinese-owned or Chinese-linked Tier 1 and Tier 2 suppliers are embedded throughout the conventional vehicle supply chain — in seating, interiors, lighting, HVAC systems, and electronics. The CFIUS review process addresses acquisitions of U.S. companies by Chinese entities but does not cover organic growth by Chinese-owned suppliers already operating in the United States.

Lidar and camera systems for advanced driver assistance (ADAS) and autonomous vehicle applications represent a newer exposure. Hesai Technology and Innovusion, both Chinese-founded companies, supply lidar sensors to U.S. automakers and autonomous vehicle developers. Hesai went public on Nasdaq in 2024. The Commerce Department's Bureau of Industry and Security has examined whether lidar technology with dual-use potential should be subject to export controls, but no action has been taken as of this writing.

The national security concern that has drawn the most sustained regulatory attention is not market share or component sourcing — it is data. Modern connected vehicles generate continuous streams of location data, camera imagery, lidar point clouds, and driver behavioral data. A vehicle operating in the United States and transmitting data to servers in China — or to Chinese-owned cloud infrastructure — creates a persistent intelligence collection capability that operates at scale without any active human intelligence effort.

The Commerce Department's Bureau of Industry and Security proposed rules in September 2024 that would prohibit the import or sale of connected vehicles incorporating Vehicle Connectivity System (VCS) hardware or software with a sufficient nexus to China or Russia. The proposed rules would cover the telematics control unit, Bluetooth, cellular, satellite, and Wi-Fi modules, and the software that processes data from those systems. The rules were finalized in January 2025 with a phased implementation timeline.

The connected vehicle rules represent a significant expansion of the national security perimeter around Chinese technology. Unlike semiconductor export controls or FEOC battery restrictions, the connected vehicle rules apply to the software and data layer of the vehicle — not just the physical components. They would, if fully implemented, effectively prohibit Chinese-branded connected vehicles from the U.S. market regardless of where they are assembled, and would require non-Chinese automakers to audit and potentially replace Chinese-sourced telematics hardware and software.

Chinese-owned automotive manufacturing in the United States is limited but not absent. Fuyao Glass, the world's largest automotive glass manufacturer, operates a major facility in Moraine, Ohio — the subject of the 2019 documentary American Factory. Fuyao supplies glass to GM, Ford, Honda, and other automakers. The facility employs approximately 2,300 workers and has been cited by Chinese state media as a model of Chinese investment in American manufacturing.

Section 232 tariffs on steel (25%) and aluminum (10%), imposed in 2018 and maintained through subsequent administrations, have constrained Chinese steel and aluminum from entering the U.S. automotive supply chain directly. But Chinese steel producers have established or acquired processing facilities in third countries — Vietnam, Malaysia, Mexico — that convert Chinese-origin steel into processed forms that may qualify for tariff exemptions. The Commerce Department has pursued antidumping and countervailing duty cases against several of these circumvention routes.

The regulatory framework governing Chinese automotive exposure spans multiple agencies and statutory authorities. CFIUS reviews acquisitions of U.S. automotive companies and suppliers. The IRA's FEOC provisions govern battery and critical mineral sourcing for tax credit eligibility. The Commerce Department's connected vehicle rules address the data and software layer. Section 232 and antidumping/CVD tariffs address steel, aluminum, and finished vehicles. The Export Administration Regulations govern dual-use technology in ADAS and autonomous vehicle systems.

The framework is comprehensive in coverage but fragmented in administration. No single agency has visibility across the full supply chain from raw materials to finished vehicle to data transmission. The result is a patchwork in which a vehicle can be compliant with FEOC battery rules, subject to connected vehicle software restrictions, assembled by a Chinese-owned company in a USMCA country, and contain Chinese-origin steel processed through a third country — all simultaneously, with different agencies responsible for each dimension.

The automotive sector is likely to remain a focus of national security policy for the foreseeable future. The combination of large consumer data collection, critical infrastructure dependency (EVs as grid assets), and the scale of Chinese industrial capacity in the sector creates a policy problem that tariffs alone cannot resolve. The connected vehicle rules, FEOC implementation, and ongoing CFIUS activity suggest the regulatory perimeter will continue to expand.