Lokendra Sharma & Pranay Kotasthane
Global supply chains are at an inflection point. While the COVID-19 pandemic shifted the focus from efficiency (just in time) to resilience (just in case), two developments in September 2024 indicate that another shift is underway in how supply chains are envisioned and operationalised — this time towards security (just to be secure).
Moves by the U.S. and Israel’s pager attack
On September 23, the United States Department of Commerce proposed rules which, if accepted “would prohibit the import or sale of certain connected vehicle systems designed, developed, manufactured, or supplied by entities with a sufficient nexus to the PRC or Russia”. The proposed rules target both the software and hardware associated with vehicle connectivity systems as well as automated driving systems. While the 100% tariffs on Chinese EVs announced by the U.S. earlier this year stemmed from competition concerns aimed at reducing their sale in the domestic market, the newly proposed rules, which stem from national security concerns, would effectively ban their sale in the U.S.
The U.S. case against Chinese connected car tech is that both hardware and software components in cars employing some form of external communication capabilities can be potentially misused. The idea is that cars with connected car tech are essentially mobile listening posts, and that malicious actors can use their cameras and sensors for espionage purposes. Worse, these cars may even be disabled or hijacked — especially those level 3 and above on the Society of Automotive Engineers’ levels of driving automation. For security hawks, handing over such control to a state with which you may be in a future conflict simply carries overwhelming risks.
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