[KH Explains] US crackdown on Chinese connected vehicles unsettles Korea
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The South Korean government and automotive industry are on high alert as the US prepares to enforce regulations on Chinese-made connected vehicles this fall, citing national security concerns about potential data leaks involving American consumers.
While the focus seems to be on complete vehicles, the regulations could indirectly affect Chinese-made components if they are deemed integral to the data collection and transmission processes that raise security concerns. The broad scope of the term “connected vehicles” -- covering any car with navigation or wireless software that communicates with systems outside of the car -- could bring many China-sourced components used in Korean vehicles, such as telematics control units and wireless communication modules, under the purview of the new US regulations.
While experts recognize the US regulatory move as part of the broader geopolitical and technological competition between the US and China, they also stressed that connected vehicles genuinely pose risks of data leakage, with the Chinese government already utilizing such data for domestic surveillance purposes.
Security vulnerabilities
US Secretary of Commerce Gina Raimondo emphasized the gravity of these issues in a Senate Appropriations Committee hearing last week. She described Chinese-connected vehicles as smart cars equipped with numerous sensors and chips, controlled by software that can transmit vast amounts of data such as GPS locations, driving habits and even in-car conversations -- back to China.
In an interview with Reuters earlier this month, Raimondo even stated that the US is analyzing data to determine the extent of the measures required, which could range from a total ban on Chinese-made connected vehicles to more nuanced restrictions.
“The US has been wary of intellectual property theft and confidentiality breaches from Chinese cyber activities for over a decade. They’ve taken steps like banning Huawei equipment to secure their supply chains, especially in defense-related technologies,” said Euom Ieck-chae, a professor who researches system security at Chonnam National University.
Kim Jung-jin, a professor in the School of Artificial Intelligence at Southwest University of Political Science & Law in Chongqing, China, elaborated on the privacy risks associated with connected vehicles.
“These include recording drivers' conversations, constantly filming the exterior while driving or parking, and the potential for personal data to be extracted when parts are serviced or replaced," he said.
Kim noted that the Chinese government claims it can manage the leakage of personal information from connected vehicles through proper legislation.
“However, the irony is that within China, the government already uses such data from its citizens’ connected vehicles for domestic criminal investigations,” he explained.
Clarity urged
The Korean government and auto industry have urged the US Department of Commerce to clearly define connected vehicles, focus on high-risk parts, and provide time for supply chain adjustments.
“The term, 'Chinese connected vehicles,' is too vague, and this ambiguity is making the Korean auto industry quite anxious. For instance, network communication modules, which allow cars to connect to networks like cellular and Wi-Fi for real-time data exchange, could be a significant concern. Major Chinese suppliers like Quectel and Fibocom dominate this market, and the US might see their integration into vehicle systems as a security risk,” a Korean auto industry insider explained.
Korea’s Ministry of Trade, Industry and Energy said that it has expressed its concerns to the US Department of Commerce. In a formal submission, the ministry urged the US to provide a clear definition of connected vehicles, focus regulations on parts and services that pose significant national security risks, and allow sufficient time for the industry to adapt its supply chain.
Hyundai Motor Group and the Korea Automobile & Mobility Association also submitted comments to the US stating that, "Adapting the connected vehicle supply chain on short notice is impractical. Such abrupt changes could lead to unintended safety issues and significantly increase production costs, disrupting both the industry and consumer markets."
The America's Alliance for Automotive Innovation and the European Automobile Manufacturers' Association have echoed the complexity of the automotive industry's supply chain and urged the US department to thoroughly review the proposal.
By Moon Joon-hyun(mjh@heraldcorp.com)
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