As U.S. and Europe hit gas on Chinese smart car restrictions, Korea sits at red light

As the United States and Europe move to tighten regulatory restrictions on Chinese smart cars over concerns that the technology onboard could turn them into “spies on wheels,” Korea is taking a comparatively lackadaisical approach to safeguards against potential national security risks.

In the United States, the Alliance for Automotive Innovation urged lawmakers across the aisle on Thursday to pass legislation within the year permanently banning the sale, import and manufacture of Chinese smart cars, or connected vehicles, according to auto industry sources on Tuesday.

Lawmakers in the U.S. Senate and House of Representatives have also pursued bipartisan legislation that would prohibit automakers with more than 15 percent Chinese ownership from selling vehicles in the country. Chinese EVs already face tariffs of up to 125.7 percent.

Europe is moving in a similar direction. The European Union concluded in February that connected and automated vehicles — mounted with cameras, radar, lidar and microphones — could pose risks to cybersecurity and physical safety after conducting a cybersecurity risk assessment.

German security authorities have separately investigated whether Chinese vehicles collect data and transmit it overseas. The European Commission is also pursuing new legislation to increase European production in strategic industries, including automobiles.

The United States and Europe have moved to introduce restrictions because connected cars continuously generate data as they travel, from location information and camera footage to audio, the shape and distance of surrounding objects and road layouts.

A single piece of data may reveal little, but information collected over long periods or combined with other data could be used to reconstruct the layouts of sensitive facilities or identify patterns of movement.

Korea revised its Motor Vehicle Management Act last year to introduce cybersecurity management certification for connected vehicles and regulations on software updates. However, the new measures have limitations because they do not prevent collected data from being transferred overseas or block software, communication modules and sensors capable of connecting to external networks.

Some 79,444 Chinese-made vehicles, including Tesla models manufactured in China, were newly registered in Korea in the first half of the year, according to the Korea Automobile & Mobility Association.

Military bases and advanced industrial sites operated by companies such as Samsung Electronics, SK hynix and Hanwha Aerospace do not restrict vehicle access based on where or by which company a vehicle was manufactured.

Critics warn that the sophisticated sensors installed in connected cars could collect information on production-line layouts, access routes and the movement of equipment at such facilities.

Where all that vehicle data ends up is another blind spot.

BYD Korea, the local unit of the Chinese automaker BYD, states in its privacy policy that some customer information is transferred to its headquarters in China.

The company says footage from cameras used for advanced driver assistance systems is processed inside the vehicle. But it does not disclose in detail how data collected by individual sensors such as lidar and radar is processed, stored or transmitted, or whether the data is used to train AI models.

“Just as backdoors in Chinese telecommunications equipment were discovered later and became a source of controversy, connected cars have complex hardware and software that make it difficult to detect a backdoor even if one exists,” Kim Pil-soo, a professor of future automotive studies at Daelim University, said. “Connected cars are essentially an early form of physical AI, and autonomous driving functions could even allow someone to take control of a vehicle.”

The stakes rise when those cars drive into sensitive facilities.

“China already restricts Tesla vehicles from entering military facilities,” Kim said. “Korea cannot simply block imported cars from being sold, but given the risk that important information on the country’s advanced industries could be leaked, the issue needs to be considered from a national security perspective.”

Korea, however, may have less room to hit the brakes as hard as the United States or Europe.

“Because Korea and China already have a special relationship that includes an FTA, it would be difficult for Korea to impose sweeping restrictions on specific brands as the United States and Europe have done,” said Yun Ji-won, a professor of national security studies at Sangmyung University. “Still, some sensitive facilities already take security measures under their own rules, such as placing security stickers over smartphone cameras upon entry. Similar safeguards could be considered for connected cars.”

BY KO SUK-HYUN [[email protected]]