A rule excluding China and Russia from connected vehicle supply chains
The United States has introduced a rule excluding China and Russia from connected vehicle supply chains on national security grounds. The rule applies not only to EVs, but to vehicles with communications functions more broadly; however, it is a major issue for EV supply chains because EVs use extensive in-vehicle software and communications. This article uses primary information to organize what is prohibited, when it applies, and how far the scope reaches.
What is prohibited
The core of the rule is excluding vehicle connectivity systems (VCS) of Chinese or Russian origin from vehicles. It prohibits the import of VCS hardware from the PRC (China) or Russia, and the sale or import of vehicles equipped with covered software. The ban also applies not only to finished vehicles but to standalone parts transactions, covering the broader supply chain. Hardware and software directly responsible for communications, including cameras, microphones, GPS, and internet connectivity, are broadly within scope.
Timing - Effective date and transition deadlines
The timeline is also a practical issue. The connected vehicle rule took effect on March 17, 2025. Existing models are subject to phased transition deadlines in MY2027 and MY2030. In addition, declarations of conformity must be submitted 60 days before the first import or sale. In other words, companies must plan sourcing and filing schedules by working backward from "when the vehicle will be sold."
Penalties and scope
Penalties give the rule force. Violations carry civil penalties of $368,136 per violation and criminal penalties of up to $1 million. The regulator, BIS, estimates that 27 to 215 entities will be affected. The number of directly covered businesses is limited, but the effects may spread widely through supply chains.
Prohibited items
The rule bans imports of China/Russia-origin VCS hardware and sales or imports of vehicles with covered software. It covers standalone parts transactions, not only finished vehicles.
Timeline
Effective March 17, 2025. Existing models face MY2027/MY2030 transition deadlines. Declarations are due 60 days before sale or import.
Penalties
Civil penalties are $368,136 per violation, and criminal penalties can reach $1 million. BIS estimates 27 to 215 affected entities.
Practical impact
Companies need supplier mapping for vehicle communications and software, plus earlier preparation for declaration filings. EV supply chain decoupling from China is being institutionalized.
Business implications and checkpoints
This rule embeds "decoupling from China" into EV supply chains as a regulatory requirement. The checkpoints are whether a company's own and suppliers' in-vehicle communications parts and software include China- or Russia-origin content, whether the changeover can meet the MY2027/MY2030 deadlines, and whether there is a system for submitting declarations of conformity. The directly covered entities are limited, but because standalone parts are also within scope, supply chain visibility becomes the starting point. Broader market bifurcation and China's export push are covered in the related articles.