Hyundai prepares for US rules against China-connected vehicles

Hyundai Motor Group is preparing for potential U.S. measures against China-connected vehicles. The South Korean automaker is diversifying its parts supply chain outside China and lobbying efforts in the United States. 

“Hyundai Motor and Kia have to brace for the worst by reducing their reliance on China and broadening their supply chains into other countries such as Vietnam,” Lee Ho-geun, an automotive engineering professor at Daedeok University, told the Korea Times.

“There stands a possibility that the U.S. will regulate any connected vehicles that are equipped with Chinese parts. Under the scenario, the Korean automakers will be seriously affected, so they are advised to make more efforts to reduce the proportion of Chinese parts in their automobiles.”

Hyundai Motor Group—which includes brands like Hyundai, Kia, and Genesis—is preparing for the United States to issue regulations limiting Chinese-connected vehicles in the country. Recently, US Commerce Secretary Gina Raimondo announced that her department would issue rules against Chinese-connected vehicles this autumn. 

Raimondo added that the department is considering extreme actions against Chinese-connected vehicles. She clarified that the department’s regulations were essential to protect against national security risks to American data. In February, the Biden administration initiated a probe to investigate if Chinese vehicle imports pose a national security risk. 

The United States is taking a bold stance on Chinese electric vehicles (EVs) imports. Earlier this week, the Biden Administration increased tariffs on Chinese EV imports in the United States by over 100%. The White House is also considering penalties for Chinese EVs produced in Mexico. The Biden Administration believes China is trying to avoid tariffs and other regulations by making electric vehicles in Mexico and importing them into the United States.

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