Foreign spy cars? The US government is not messing around with Robotaxis.

Some Chinese automakers are betting on driverless vehicle technology to develop robotaxis. But the US government is about to take back the reins on Chinese testing of driverless vehicles in the US market due to national security. Here are the details and why it matters.

Going all in

China appears to be stepping on the gas when it comes to developing driverless vehicles. It makes sense considering China accounted for nearly 62% of the 10.4 million battery-powered electric vehicles (EVs) that were manufactured worldwide in 2023; EVs are more easily adapted to driverless technology. For context, the US came in second and produced just 1 million, according to GlobalData.

Chinese companies are already heavily experimenting with driverless technology in their domestic market, with plans to continue this research abroad. Baidu operates a fleet of 500 robotaxis, often found without safety drivers, for emergencies in Wuhan, China. The company notes that it plans to add another 1,000 vehicles. Sixteen or more Chinese cities have allowed Chinese companies to test driverless vehicle technology on public roads, as their industry tries to take control of global driverless vehicle leadership.

Here’s why, and perhaps part of the reason why the US government is about to intervene. Chinese companies have set up research facilities in the US and Europe and are sending data and research home, where they are not allowed to leave the country.

US response

The US Department of Commerce is expected to propose a policy in August that would ban Chinese software in driverless and connected vehicles. More specifically, the Biden administration intends to propose a policy that bans Chinese software in vehicles in the US that have Level 3 or higher automation, as well as in vehicles with advanced wireless communications capabilities developed in China.

In the 12 months ending in November 2022, Chinese driverless vehicles tested more than 450,000 miles in California with autonomous vehicle technology, raising concerns about connected vehicles that use driver monitoring systems to listen, record or potentially control the vehicle. .

“The risks to national security are quite significant,” Commerce Secretary Gina Raimondo said in May, according to Automatic News. “We decided to take action because this is something really serious.”

Why does this matter

For investors, the long-term ramifications could be enormous. Potential U.S. government policy could slow China’s ambitions toward driverless technology, especially for automakers like Niowhich announced Navigation on Pilot (NOP) and Autonomous Driving as a Service (AdaaS) for its ET7 sedan. The policy could also certainly harm the Chinese auto industry’s growth plans. BYDwhich has just announced an agreement with Uber Technologies bring 100,000 EVs to the latter’s fleet.

The story continues

US companies that could benefit from this potential policy would be Tesla (NASDAQ:TSLA), General Engines (NYSE:GM)and AlphabetIt’s Waymo. While Ford Motor Company and Volkswagen By throwing in the towel on the development of its driverless vehicle technology, Tesla could recover from the delay in launching the robotaxi, now in October, and have less competition. It would also give General Motors more time to recover from the shutdown of cruise operations.

Ultimately, for investors, it will be increasingly important to watch a series of automotive developments between the US and China, as well-built, highly affordable and also heavily subsidized Chinese EVs attempt to enter the US market with or without driverless technology. The US government is currently intervening because allowing this at this time could paralyze US EV and autonomous development in the near term – and that would be bad news for many investors.

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Suzanne Frey, an Alphabet executive, is a member of The Motley Fool’s board of directors. Daniel Miller has positions at Ford Motor Company and General Motors. The Motley Fool has positions and recommends Alphabet, BYD Company, Baidu, Tesla, Uber Technologies, and Volkswagen Ag. The Motley Fool recommends General Motors and recommends the following options: Long January 2025, $25 calls on General Motors. The motley fool has a disclosure policy.

Foreign spy cars? The US government is not messing around with Robotaxis. was originally published by The Motley Fool