Bloomberg reported on Saturday that the Biden administration planned to put the rule in place. The plan was first reported by Reuters.
The proposal comes as a result of an investigation into whether Chinese-made vehicles threatened national security. The Commerce Department started the probe in February, citing the large influx of personal data that cars take in through their sensors and cameras.
A software ban would go into effect for vehicles modeled in 2027, while the hardware rule would take effect for vehicles modeled in 2030. Units without a model year would be under the rule starting Jan. 1, 2029.
Senior administration officials said this is because most US market vehicles don’t have any Chinese- or Russian-made software, making that aspect of the rule a largely preventative measure. It may take longer to pivot away from Chinese-made hardware, however.
It’s unclear how many vehicles currently have Chinese-made hardware or how the US auto industry’s supply chain will need to adapt to accommodate the potential rule.
Once a rule is proposed, the Commerce Department invites public comments for 30 days after publication.
Separately, the White House announced a series of commitments for small and medium-sized automakers on Monday, with a $9.1 million grant to launch an electric vehicle supply chain transition program in Michigan.
As part of the US actions, Monroe Capital committed to raise up to $1 billion for small automakers to grow and diversify their business.