The US government's plan to ban Chinese tech in new cars could lead to higher prices for consumers. There's a push in the government to lock out vehicles with China ties, either through investment or tech, out of the US market. A Senate committee approved a bill to ban manufacturers that are more than 15% owned by Chinese entities. Meanwhile, a different measure seeks to eliminate components made in China from cars sold in the US.
A new report from Reuters explores the efforts at one automotive electronics startup, based in Ohio, to scale up quickly enough to fill the demand that's sure to be coming its way when carmakers can't turn to China for as many parts. The company, called Eagle Wireless, recognizes the opportunity facing it, but there's plenty of work to do—not simply to scale up manufacturing, but also to reach some semblance of cost parity. Per the company, its modules still cost 5% to 15% more than the equivalent parts from China.
View Price on AmazonThe components that the law will target mostly pertain to communications and location tracking. One former Detroit auto executive told Reuters, "My jaw dropped when I looked at the price increase" when comparing the invoice for an ADAS system produced outside China with one imported from China. As you'd guess, this has the potential to lift prices of new cars in the US, which of course have already seen a massive jump since the start of the decade and COVID. Cox Automotive quoted the average transaction price of a new car this past May at $49,456.
Some automakers will be more at risk than others. The software chief for Rivian, for example, told Reuters that he believes the electric truck maker can weather this storm better than some, because it can more nimbly shift between suppliers. Naturally, the number of cars you sell impacts the weight of this challenge, which may explain why Ford sought an authorization to continue importing models like the Lincoln Nautilus, which is built in China.
Source: thedrive.com
