The clock is ticking down on President Biden’s tenure in the White House, which leaves little time for the administration to cement its clean energy legacy in American history. The Biden administration is working to make use of every last second—pushing through rules, regulations, and funding requests to minimize the chance that the incoming cabinet can’t undo the progress made for electric vehicle growth over the past four years.
But there are some unusual crackdowns coming on Chinese cars, software and even chips, and it’s anyone’s guess whether they’ll stick around in the coming months.
Welcome back to Critical Materials, your daily roundup for all things electric and automotive tech. Today, we’re chatting about Biden’s final moves, the White House’s latest ruling on AI chips and how that impacts self-driving tech, and the Department of Transportation’s $636 million funding round for EV charger grants. Let’s jump in.
30%: Biden’s Final Crackdown On Chinese Cars Sets Up Trump For EV Showdown
Photo by: Midjourney AI
One of Biden’s last parting gifts for Beijing is bound to stir up controversy in the auto industry. The administration is set to finalize rules on Tuesday that effectively ban nearly all Chinese cars and trucks—including EVs—from U.S. roads.
The justification is one that we’ve heard tirelessly: national security. Cars with hardware and software sourced from China are the subject of the ban, which isn’t exactly a new focus of the Biden cabinet. And the timing of this ruling will set the stage for a tense handoff to Trump’s incoming administration. (It’s also worth noting that this comes at a time when the U.S. Supreme Court is mulling whether to ban the Chinese social media app TikTok, although users seem to be immediately moving to another one.)
New changes to the rule, which will be handed over to the Trump administration for final sign-off, include widening the ban proposed in late 2023. The new proposition now includes heavier commercial vehicles as well as additional provisions that increase the scope to effectively ban all Chinese cars and trucks from entering the U.S. market (including self-driving cars). Interestingly, it loosens restrictions on Chinese-developed software developed prior to the ban as long as a Chinese company doesn’t maintain the code.
Here’s what Reuters has on the topic:
In September, her department proposed a sweeping ban on key Chinese software and hardware in connected vehicles on American roads, with software prohibitions to take effect in the 2027 model year and those on hardware in 2029. They also bar Chinese car companies from testing self-driving cars on U.S. roads.
The rules also cover Russian vehicles and components.
The U.S. Commerce Department said in the final rules it was making some changes, such as exempting vehicles heavier than 10,000 pounds from the requirements, which would let China’s BYD continue to assemble electric buses in California.
On Monday the department said it planned to soon propose rules barring Chinese software and hardware in larger commercial vehicles, including trucks and buses. A final decision will be up to the incoming Trump administration.
Let’s be clear that while this ban is aimed at China, it will also affect domestic automakers that source hardware and software from China—which is probably most or all of them, in some form or fashion.
For example, both Ford and General Motors are expected to be affected by the ruling as vehicles like the Lincoln Nautilus and Buick Envision ultimately hail from products built in China. However, with the scope now giving a path forward for software maintenance, it opens a window for automakers.
Still, some manufacturers are shaken by the ruling. Geely (the parent company behind Volvo, Polestar, Lotus, and more), has said that the ban would “effectively prohibit” its brands from selling vehicles in the U.S., or at least seek special authorization to continue doing business as-is.
InsideEVs is reaching out to several automakers to ask about the practical effects of this ban. We will update these stories when and if we hear back.
If nothing else, this ruling should underscore the bureaucratic and geopolitical hurdles that automakers doing business in America will have to overcome very soon. Biden’s hand-off to the Trump administration puts the ball squarely in their court.
This move also signals a potentially turbulent phase in the U.S.-China trade relations game—until Trump comes in, anyway. Will the incoming presidency fill the big shoes that talked about the importance of protection from foreign powers? Or will it fold to pressure? Either way, automakers across the globe are bracing for impact, and the outcome is anybody’s guess.
60%: White House’s New Rule On AI Chips Has Nvidia Fuming
The White House has also issued a sweeping new Artificial Intelligence Diffusion rule that would limit countries of concern, such as China, from accessing U.S. tech which would aid in the development of Artificial Intelligence systems. Needless to say, domestic chip manufacturers like Nvidia aren’t too happy about it. And there are big implications for the automotive world too.
See, when it comes to AI hardware, Nvidia has been partnering with… well, just about everybody, in nearly every conceivable industry. Automakers, including those in China, are no exception. There’s BYD, Geely, Xiaomi, Xpeng, Zeekr, and many more—all of which use some form of powerful Nvidia hardware in the race to self-driving. The outgoing administration’s new rule, while not targeting autonomous driving capabilities specifically, could significantly limit the access of these resources to Chinese OEMs.
Nvidia has been a staple in the burgeoning Chinese EV market. Whether it be GPUs used to train self-driving models for cars, or its proprietary DRIVE system—a suite of software and hardware used for automated driving—the U.S.-based tech has found its way into cars abroad. And these partnerships have proven to be a goldmine for Nvidia, which earns as much as 15% of its annual revenue from China as a whole. As written, these latest proposed export restrictions could bring those partnerships to a screeching halt.
It’s worth noting that the White House’s briefing on the matter doesn’t call out either China or Nvidia by name. However, both see the writing on the walls. China’s Ministry of Commerce opposed the final ruling while Nvidia immediately (and publicly) clapped back by calling the ruling “unprecedented and misguided” while noting that it threatened to derail innovation across the globe.
To Nvidia’s point, the restrictions technically aren’t just on China. The rest of the world would also receive some restrictions on the number of chips they could import from the U.S.—even if they are preferential trade partners. Nvidia’s fear could be that if other countries are unable to gain access to their hardware, these measures could drive global competition away from American companies and back into the hands of competition in China.
This ruling could also push more automakers (and other business partners) further away from Nvidia and other U.S.-based AI partners as export restrictions may limit how quickly businesses in countries of concern could scale. But, the White House argues, the restrictions are crucial in the name of national security. Nvidia instead says that the ruling is “anti-China” and notes that it does “nothing to enhance U.S. security.”
Notably, Nvidia has a lot to lose in this race. It also isn’t the first time the company has walked this tightrope, previously navigating export restrictions of its high-end H100 GPUs to China in 2022. However, the electronics giant’s Drive system is so deep-rooted in automotive projects in China that it could prove to be extremely difficult for automakers to pivot to a new platform with just 120 days of notice before the ruling goes into effect.
90%: Biden Rushes Through $636 Million In EV Charger Grants Before Trump’s Return
Photo by: Tesla
In what will likely be the final push for the outgoing administration’s clean energy legacy, a last-ditch effort to rush through EV charger grants was solidified. The final play was by the U.S. Department of Transportation which announced a whopping $636 million in funding to EV charger projects to ensure a final burst of money for public charging infrastructure just days before Trump is set to take office.
The money comes from the $2.5 billion allocated as part of the 2021 Bipartisan Infrastructure Law’s Discretionary Grant Program. This round of funding received 416 applicants who requested a combined $4.05 billion in federal funding—that’s more than six times the total amount available. Of the nearly $636 million in approved grant funding, $268 million will go towards seven DC fast charging projects located along Alternative Fuel Corridors while the remaining $368 million will be split amongst 42 projects aimed at expanding EV charging within communities. After all is said and done, the grant has a measly $700,000 left.
Today, the number of public EV chargers has topped 206,000. According to the DoT, this means that the U.S. is anticipated to hit its goal of building out 500,000 public EV chargers before its original timeline of 2030—assuming progress either stays the course or picks up during the second half of the decade. In Q3 2024, the U.S. was deploying more than 1,000 new EV chargers every single week. That type of rapid progress helped the U.S. in doubling the number of available fast chargers in under five years.
Significant gaps in the charging infrastructure still remain—hence the push for a half-million EV chargers over the next five years. And I know that 49 projects do not seem like a lot for $636 million. But they are.
The projects are anticipated to build nearly 11,500 charging ports. The average cost? Well, that equals out to around $55,300 per plug.
The timing is, of course, politically strategic. The Biden administration has been going all out on what seems like use-it-or-lose-it money. Trump has pledged to undo the Biden admin’s progress on EVs, taking a complete U-turn on the last four years of the federal government’s actions. The unspent money is expected to be rerouted elsewhere, leaving those would-be clean energy projects (anticipatedly) high and dry.
So what’s next? That’s really the question that the entire auto industry is uncertain of. Trump’s industry cheerleader, Tesla CEO Elon Musk, has been encouraging the president-elect to do away with the EV tax credit as he’s convinced it will “probably” help Tesla in the long run. Other EV makers have been bracing for an almost certain uphill battle.
One thing is clear: the forward-looking fight isn’t just about the tax credit, it’s about infrastructure, too. If the charging rollout loses government support, it could mean a slower push toward electrification after automakers have already committed billions of dollars—both privately and taxpayer-funded—to electrify their fleet.
100%: What Are Your Predictions For The Next Four Years?
Photo by: InsideEVs
I’m not sure when EVs became so politicalized, but it’s been exhausting to follow. And as vehicles become more ingrained with technology, that politicization has shifted from just EVs to cars as a whole. And with policies affecting the auto industry becoming so mercurial amid a rush of protectionist measures, the future of what the auto industry will become is anybody’s guess.
For those of you paying attention, I want to know your opinions of what we’ll see over the next four years. Do you think the current software and hardware ban will plan out as written? Will the EV tax credit go away? Will OEMs continue down the path of developing EVs even if emission standards are loosened?
Let me know in the comments.
