{"id":693,"date":"2026-07-21T14:40:10","date_gmt":"2026-07-21T14:40:10","guid":{"rendered":"https:\/\/officemovingamerica.com\/?p=693"},"modified":"2026-07-21T14:40:10","modified_gmt":"2026-07-21T14:40:10","slug":"u-s-auto-industry-races-to-purge-chinese-connected-car-hardware-amid-federal-push","status":"publish","type":"post","link":"https:\/\/officemovingamerica.com\/?p=693","title":{"rendered":"U.S. Auto Industry Races to Purge Chinese Connected-Car Hardware Amid Federal Push"},"content":{"rendered":"<div>\n<div>\n<p>By Nora Eckert<\/p>\n<\/div>\n<div>\n<p>SOLON, Ohio, July 21 (Reuters) &#8211; A nondescript facility south of Cleveland has become an early staging ground for the auto industry&#8217;s next \u2060supply-chain pivot: \u2060replacing vehicle hardware from China.<\/p>\n<p>Read more <a href=\"https:\/\/officemovingamerica.com\/?p=691\">Trump\u2019s Primetime Speech Thursday: What to Know<\/a><\/p>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<p>The plant belongs to Eagle Wireless, a maker of \u2060electronics that was formed in late 2025, largely in response to a federal rule that bans certain Chinese connected-car software and hardware in U.S. vehicles by the end of the decade.<\/p>\n<\/div>\n<div>\n<p>\u201cThere\u2019s \u200ba massive opportunity for us,\u201d said TJ Dembinski, president of Eagle Wireless. He said Eagle grew out of a need to counter China\u2019s dominance in modules, which he knew would be challenging for U.S. automakers as the regulations took effect.\u00a0<\/p>\n<\/div>\n<div>\n<p>It\u2019s been a mad dash to scale up production of modules, \u200cthe small circuit boards that enable vehicles to have a wireless connection \u200cto the outside world. Eagle started with about 140 employees and is aiming to grow to 1,000 in the next three years. Its revenue expectations have increased by almost 100% for the year, to nearly $100 million.\u00a0<\/p>\n<\/div>\n<div>\n<p>\u201cIt\u2019s been insane,\u201d Dembinski said.<\/p>\n<\/div>\n<div>\n<p>The connected-vehicle rules were adopted in January 2025 under U.S. \u2060President Joe Biden, based on national \u2060security concerns around data privacy, and have been kept in place under the Trump administration. They prohibit the use of Chinese connectivity software starting \u200bin the 2027 model year, and hardware from model-year 2030. Though those deadlines may seem far off, automakers plan vehicle programs years in advance, meaning compliant suppliers must be locked in now.<\/p>\n<\/div>\n<div>\n<p>Amid heightened geopolitical tensions and unpredictable trade wars, auto companies are in the middle of a disruptive uncoupling from China, on everything from inexpensive components \u2013 like Eagle\u2019s modules \u2013 to battery materials and essential rare earth minerals.<\/p>\n<\/div>\n<div><\/div>\n<div>\n<p>Industry concerns around complying with the regulations were heightened after electric-vehicle maker Polestar, which is majority owned by China\u2019s Geely Holding, was banned last month from new-vehicle sales in the U.S. under the rule.<\/p>\n<\/div>\n<div>\n<p>COSTLY CHANGES<\/p>\n<\/div>\n<div>\n<p>The components most affected under \u200bthe hardware rule include satellite communications systems, external antennas and other microcontrollers that enable a vehicle\u2019s external communication, said Matt Wyckhouse, CEO of security firm Finite State and an adviser to Eagle Wireless.<\/p>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<p>Migrating parts supply away from China typically represents \u2060a \u2060significant cost increase. One former Detroit executive said when \u2060they compared the cost of a non-China automated-driving system with one \u200busing Chinese tech, including LiDAR, they were floored.\u00a0<\/p>\n<\/div>\n<div>\n<p>&#8220;My jaw dropped when I looked at the price increase,&#8221; the former executive said. Most ADAS componentry is so far not restricted under the connected-vehicle rule, although the government \u200bhas warned it may address it separately in the future.<\/p>\n<\/div>\n<div>\n<p>Eagle said it is working \u2060to reach cost parity with Chinese competitors, but there is still a 5% to 15% gap on its modules.<\/p>\n<\/div>\n<div>\n<p>The shift away from Chinese suppliers also poses logistical challenges. Parts-supplier executives say car companies are demanding deeper visibility into their supply chains to ensure there are no Chinese components that would run afoul of the U.S. rules.<\/p>\n<\/div>\n<div>\n<p>The rule \u201crequires a deep examination of supply chains and aggressive compliance timelines,\u201d said Hilary Cain, senior vice president of policy for the Alliance for Automotive Innovation, an industry group that represents most major automakers.<\/p>\n<p>Read more <a href=\"https:\/\/officemovingamerica.com\/?p=689\">Trump Prepares Fresh Tariffs on Dozens of Countries, FT Reports<\/a><\/p>\n<\/div>\n<div><\/div>\n<div>\n<p>EV startups like Rivian say they are in a better position to comply than some more-established automakers because they can more nimbly shift suppliers or work to source their own componentry. Wassym Bensaid, the automaker\u2019s software chief, told Reuters that he has been careful in selecting suppliers to work with, and often builds in backups in case of geopolitical \u2060disruptions.<\/p>\n<\/div>\n<div>\n<p>Some companies are seeking exemptions from the rule. Ford Motor has asked for authorization to continue importing some China-produced models, Reuters first reported. Volvo Cars &lt;(VOLCARb.ST)&gt;, also owned by Geely, was one \u2060of the first automakers to receive an authorization.<\/p>\n<\/div>\n<div>\n<p>The Chinese foreign ministry has previously urged the United States &#8220;to respect the laws of the market economy and principles of fair competition.&#8221; It argues Chinese cars are popular globally because of their technological innovations, reflecting an aggressive home market.\u00a0<\/p>\n<\/div>\n<div>\n<p>CONVEYOR BELT OF MODULES<\/p>\n<\/div>\n<div>\n<p>At Eagle\u2019s Solon, Ohio plant, machines crank out modules for a variety of industries, with the planned expansion nearby for vehicle applications. The company expects to reach an annual run rate of producing about 2 million modules by the end of the third quarter, and its new facility will have an even higher capacity, Dembinski said.<\/p>\n<\/div>\n<div>\n<p>A \u201cfancy vending machine,\u201d as Eagle\u2019s tech chief Joel Young calls it, sorts capacitors, diodes and other parts. Those are placed onto circuit boards, and then a conveyor belt, which is sent through a 500-degree oven. The modules are later engraved with a serial number, inspected for quality and plucked by robotic arms for packaging.<\/p>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<p>Production of connectivity modules is concentrated among a few manufacturers, according to market intelligence firm Counterpoint Research. Chinese vendors account for nearly half of global automotive cellular IoT module shipments, the firm said. In North America, Eagle is also competing against top producers Rolling Wireless and LG.<\/p>\n<\/div>\n<div><\/div>\n<div>\n<p>While Eagle bills itself as a U.S. compliant solution for automakers, the company itself has work to do to meet the rules. Eagle got its start by licensing the design of the module from China\u2019s Quectel Wireless Solutions,\u00a0the global industry leader.<\/p>\n<\/div>\n<div>\n<p>Eagle must replace that \u2060with its own technology by the model-year 2030 cutoff, as the rules bar any connected hardware designed, developed, manufactured or supplied by China.\u00a0<\/p>\n<\/div>\n<div>\n<p>Young said he is racing to create a product that can replace the existing Quectel ones without headaches for automakers. \u201cI have to add a lot of engineers,\u201d he said. \u201cWe\u2019ll embrace all the tools that we can possibly have.\u201d<\/p>\n<\/div>\n<div>\n<p>The strategy of licensing tech from China is one the auto industry has leaned on before. For example, Ford is licensing battery technology from China\u2019s CATL for U.S. production of batteries.<\/p>\n<\/div>\n<div>\n<p>\u201cYou could end up with a situation where you end up becoming more dependent on China through these partnerships,\u201d said Ilaria Mazzocco, deputy director and senior fellow at the Center for \u200bStrategic and International Studies. On the other hand, she said these collaborations might be the only way for the U.S. to gain expertise in an increasingly competitive ecosystem.<\/p>\n<\/div>\n<div>\n<p>\u201cYou could end up in a situation \u200bwhere, through these partnerships, you end up becoming\u00a0a lot less dependent.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/officemovingamerica.com\/?p=687\">Northrop Grumman Raises 2026 Forecasts on Strong Weapons Demand<\/a><\/p>\n<\/div>\n<div><\/div>\n<div>\n<p>(Reporting by Nora Eckert; Editing by Mike Colias and Aurora Ellis)<\/p>\n<\/div>\n<div>\n<p><b>Copyright 2026 Thomson Reuters<\/b>.<\/p>\n<\/div>\n<div><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>US News is a recognized leader in college, grad school, hospital, mutual fund, and car rankings. 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