US rule on connected cars lifts market uncertainties: South Korea

Seoul, Jan 15 South Korea's industry ministry hailed Washington's finalised rule on connected cars on Wednesday, saying it will remove many uncertainties for South Korean automakers.

The US Bureau of Industry and Security on Tuesday (U.S. time) unveiled the new rule that will ban sales of connected cars with cameras, software and other components manufactured in China and Russia, reports Yonhap news agency.

"After the United States made a preliminary announcement on the regulation of connected cars in early 2024, the government has gathered opinions from the domestic industry," the ministry said.

"The final rule has reflected most of the government's opinions, including narrowing the scope of regulation, clarifying terms and easing rules regarding the submission of the software bill of materials (SBOM), addressing most of the industry's concerns," it added.

The ministry said it plans to continue coordinating with the U.S. for the implementation of the rule. Under the latest rule, the prohibition on sales of vehicles with China or Russia-made software will take effect for model year 2027, with hardware prohibitions coming into force for model year 2030.

Carmakers must provide a declaration of conformity to export vehicles to the U.S. market and are required to maintain records of the SBOM for a minimum of 10 years.

Meanwhile, the US Department of Commerce has proposed a rule to prohibit the import or sale of connected vehicles integrating certain software and hardware with a "nexus" to China or Russia, citing national security concerns.

The department's Bureau of Industry and Security (BIS) published a notice of the proposed rule amid concerns that those cars with cameras, sensors, software and other components -- manufactured in China -- could be used to glean sensitive data about drivers and passengers, as well as U.S. infrastructure.

The rule is expected to lead South Korean automakers to readjust their supply chains if they have used prohibited software and components from China. But the measure would make it difficult for their potential Chinese competitors to enter the U.S. market, observers said.