Can China’s No. 2 automaker make it to America?

Is the long freeze on Chinese automakers selling cars in the United States finally beginning to thaw? China is the world’s largest automobile market and is now the largest automobile exporter as well. But high tariffs and geopolitical tensions have kept Chinese automakers away from American customers. Many of those cars are ready for prime time It is fully competitive with current offerings in the United States.

Geely is among the Chinese automakers that want to sell their cars here. It has already crossed one of the two hurdles any would have to cross to do so: Its Volvo Cars division already has an assembly plant in South Carolina that would allow it to manufacture its cars locally. That factory now builds Volvo’s electric SUV EX90 and the Polestar 3 that share its platform; Volvo will add the XC60 late this year.

Few American buyers realize this, but Geely has controlled the Swedish automaker for more than 15 years. Is the Volvo plant a potential foothold for Geely’s future in the US?

Software from “countries of concern”

The challenge for Geely is that any Chinese company that sells cars in the United States must certify that all self-driving software, and all connectivity and IT hardware and software, were not developed or controlled by a “country of concern” (China or Russia). Those restrictions fall within a Ministry of Commerce rules Which entered into force in March 2025; Its purpose is to protect the country from hostile use of advanced automotive technologies by enemy states.

This rule was initiated by the Joe Biden administration, and was finalized by the second Donald Trump administration. The software-related provisions go into effect next month for vehicles in model years 2027 and later. The device ban comes three years later, starting with 2030 model year cars. The ban sought to avoid several types of National security risk.

One goal was to prevent any hostile government from accessing the cars via remote control technology to control their movements – whether taking over the driving remotely or disabling them en masse. Another goal was to ensure that the vehicles could not collect personal information about persons of interest in the United States (corporate executives, members of the military, celebrities, etc.). The fear is that vehicles could record voice and facial recognition data, their travel patterns, contacts, phone calls, and more — all of which could be used to train AI programs. The ultimate goal, broadly speaking, was to prevent vehicles produced by manufacturers in those countries from capturing detailed images and data about American roads and the built environment through which the cars traveled.

Sam Abu Al-Samad, vice president of market research at Telemetry, takes a more critical view of this risk. He said the measures protecting it are “a very ineffective method of spying,” compared to spy satellites, cell phone data and commercial mapping data. Despite all the risks mentioned, he suggested that Americans should be more concerned about “the data being collected.” flock and Palantir “From anything Chinese cars might send to Beijing.”

Avery Ash, CEO of Securing America’s Future Energy, or SAFE, emphasized that the rules were put in place solely for national security reasons, and are not related to national economic competitiveness. SAFE is a nonprofit think tank that advocates and lobbies for policies that reduce the United States’ dependence on oil. It sees connected and autonomous electric vehicles as an important path towards achieving this goal. Data storage locations and governance remain a concern, so the rules take a very broad look at what constitutes “control” by a Chinese entity, Ash said. Where the software is designed is irrelevant; It’s about effectively controlling the company that wrote it and the companies that designed the hardware on which it runs.

The rules do not cover “Chinese software developed before the new rules came into effect, as long as it is not maintained by a Chinese company.” According to the Ministry of Commerce. However, Ash noted that any updates to legacy software that occur after the effective date will fall under the new rules.

The ban on Chinese vehicle software inevitably leads to the Volvo issue. The public face of the company is entirely Swedish, but Geely has controlled 80 to 100 percent of the company since 2010. Sources who attended hearings last year on the trading rules felt Volvo might be able to find a way to address the ministry’s concerns. Since it is viewed as a European automaker and a household name in the United States, it will likely be able to continue building and selling cars here.

In fact, those sources indicated that Volvo is likely already in talks with the trade about its future vehicle plans, the software in those vehicles, and what it might take to get explicit approvals certifying its compliance with model-year-specific rules for every model it sells.

“Volvo Cars follows government rules in all the markets in which we operate, and is committed to working with US commerce on the technical aspects of the rule,” company spokesman Thomas McIntyre Schultz said in a statement. “We are having a productive dialogue with the Department of Commerce and it is ongoing.”

So far, no waivers to the rules have been issued, Ash said. Any company that wants this will have to require a “specific license” for vehicles, software and/or components that would otherwise be prohibited – and a separate license is required for each separate model, for each model year. He noted that companies self-document and certify their compliance, but management can review any such claims, request documentation, and test the vehicle. (This is similar to the way the US vehicle emissions certification system has worked for fifty years.)

But if future Zeekr or Geely models use the same platforms and software that Volvo will continue to manufacture in the US, the Chinese company may say: We just want to put different sheets of metal on the same car that already has a waiver, and sell it under another name. That’s what Polestar is doing now with 3 cars, largely the Volvo EX90 underneath. Why can’t we do that?

Concerns surfaced last month when it became public that the architect of the policy, Elizabeth Cannon, had recently resigned as executive director of the Office of Information, Communications Technology and Services at the Department of Commerce. (Reuters She stated that “eviction(By the Trump administration.) White House spokesman Kush Desai later said He said Atlantic “Cannon’s departure should not be read too deeply as a reflection of the administration’s broader thinking or decision-making process.”

This came shortly after a new appearance National Defense Strategy On January 23, he did not mention China much as an adversary. In a reversal of long-standing US defense policy, the new strategy uses markedly conciliatory language in dealing with China, focusing on “mutual respect” and “establishing trade.”

An insider echoed Desai’s sentiment, saying that no evidence has emerged so far to suggest that the current administration intends to scrap the trade rules. The longer-term concern will be whether Commerce will stick to its guns and demand a “robust and rigorous” review of the software, where it was developed, which entity controls its source code, and where all U.S. data is stored, that person said. Will specific licenses be issued only after these issues are carefully examined – or will Chinese manufacturers be allowed to undertake a “soft review” that leaves some risks open?

The source said that one recent example of a soft review was the deal under which A A controlling stake in TikTok’s activities in the United States It was transferred to a joint venture in which owner ByteDance retained a stake. While the ad described “comprehensive data protection, algorithmic security, content moderation, and software safeguards for US users,” Security specialists point to significant vulnerabilities.

Geely has a lot of work to do before it can sell cars in the United States under its own brands, but the Chinese automaker remains better positioned to build cars in the United States. As it stands, Geely will still need to convince the US government that its software is not Chinese at all — and was developed by an entity not controlled by a Chinese company. At a Senate Commerce Committee hearing this week, Waymo officials were questioned Due to the company’s decision to use A Zeekr RT disgruntled As the next robotics platform, a Republican senator said that the Alphabet-owned company’s assertions that the car meets all relevant mandates are “ridiculous.”

It can take nearly three years to add a new car, from a different brand, to Volvo’s plant in South Carolina. Given the fast-moving nature of the current political situation, whether Geely will actually have to demonstrate compliance of its programs with trade rules over that entire period – per model, per model year – remains subject to the changing necessities and whims of management.

Meanwhile, Geely’s goals for domestic production are not limited to the United States. While its Volvo unit will have European assembly plants in three countries by the end of the year, Ford and Geely have joined it. Discussions about Geely possibly using excess Ford factory space In Europe to produce vehicles for this market. Waymo, the leading self-driving vehicle company in the United States, is using the ride-hailing Zeekr RT as its next generation robotaxis.