The U.S. government has imposed a ban on the use of Chinese software in connected vehicles, a move that impacts numerous vehicle models that have been sold across the United States for several years. Several automakers, including Ford, are now in the process of applying for permits to continue selling these affected models. Ford, for instance, has submitted an application to keep importing the Lincoln Nautilus SUV, which is assembled in China but features software developed in the U.S. This regulation, enacted by the Biden administration in January 2025 out of national security concerns, remains in force even after the transition to the Trump administration. The ban on software applies to vehicles of the model year 2027, while restrictions on hardware components will affect vehicles of the model year 2030.

Automakers are grappling with issues such as complex approval procedures and a lack of transparency, underscoring the deep-seated integration of the U.S. automotive industry with China's supply chain. The hardware restrictions essentially require the industry to sever all ties with China's hardware supply chain, a process that is both cumbersome and time-intensive. Some automakers have already taken steps to relocate their supply chains away from China. For example, General Motors has mandated that its suppliers eliminate Chinese-made parts by 2027.

Although Volvo has secured permission, it must still fully adhere to the detailed regulations and apply separately, given its majority ownership by a Chinese entity. Automakers like Polestar and General Motors may also find themselves needing to apply for permits. General Motors, in particular, has plans to shift the production of the Buick Envision to the United States by 2028.

The regulatory changes have also reverberated through the automotive parts manufacturing sector. Industry associations have pointed out that globally co-developed software and hardware technologies are challenging to disentangle. Pirelli, for instance, has adjusted its product production due to issues stemming from its Chinese majority shareholder.