Ford and China's Xiaomi denied reports this month that they were considering setting up a joint venture to manufacture cars in the United States, although such a partnership is logical because Western automakers need Chinese expertise in electric vehicles, and Chinese companies are seeking access to the American car market, the Financial Times reported.
The main obstacle for Chinese manufacturers is not tariffs, but US regulations that restrict the use of Chinese communication systems, including communication chips and software for autonomous control, for security reasons. High-end cars rely on a multitude of sensors to collect data, most of which can be transmitted abroad, as research shows that 90% of the data from the Chinese Nio electric car was sent to servers in China, raising the risks of espionage and sabotage due to potential remote access to systems such as battery management.
Although China also restricts the transmission of car data, the US ban on Chinese communication components has raised similar concerns in Europe, where Poland is preparing to ban Chinese cars on military bases, and the UK has warned officials against discussing confidential issues in cars with Chinese electronics. Despite this, the United States and Europe support Chinese investments in the automotive industry, and President Donald Trump welcomes potential Chinese-made factories employing Americans. However, network connectivity restrictions give American companies an advantage by encouraging technology transfer in joint ventures and ensuring that control over software remains with American partners, while the European tariff-based approach has increased reliance on Chinese software and sensors, allowing Chinese autonomous companies to combine European car bodies with Chinese ones. technologies for the deployment of robotaxis.
