By: Rachel McCleery, Executive Director of the Coalition for Reimagined Mobility, SAFE
In just three and a half years the U.S. federal government went from passing a law that prioritized decoupling electric vehicle supply chains from China, and implementing a rule that blocks Chinese hardware and software from American vehicles, to suggesting that Chinese automakers are welcome to establish a plant footprint here. It’s important to assess this about-face in U.S. industrial policy—and the implications for national security—but to understand the present we must look back forty years, when the auto industry looked entirely different.
As a Michigan native, this story is both national and personal. The recession hangover from the 1970s hadn’t yet subsided for the Big Three and my dad, with his new IBEW diploma, became one of many skills tradespeople in the early eighties searching for auto industry jobs, which were in short supply. While Ford, GM and Chrysler were still recovering, the overall market was beginning to turn a corner. That’s where our allies saw opportunity. With prices dropping and consumers eager to spend again, automakers like Honda, Mazda, and Toyota who already saw success importing vehicles decided to start building plants in the U.S. for U.S. customers.
In 1985 my dad joined the construction team that built Mazda’s first U.S. plant in Flat Rock, Michigan. He was then hired as a journeyman to work at the facility. There were some changes in automation and assembly that differed from U.S. companies, but his skills and IBEW training were entirely transferrable. Mazda, which Ford at the time had a 25 percent stake in, was building engines with internal combustion technology just like the Big Three. How Mazda treated their workers was also familiar. Headquartered in Japan, an allied country, Mazda wanted a constructive, collaborative relationship with the U.S. and its employees—so much so that my dad’s plant was eventually unionized.
This is all dramatically different when compared to today’s U.S.-China relationship. Chinese automakers are powering vehicles with battery technologies that have been mastered at scale, while U.S. battery production still relies on more expensive chemistries, imported inputs, and is in early stages of commercial and retail adoption. China has a web of intellectual property protections around their LFP battery technology and need high-precision engineers and chemists to execute this work. They require specific skills that today are far more concentrated in China than in the U.S., creating uncertainty on how Chinese companies would address this skills gap here at home. Additionally, the Chinese auto manufacturing culture is not nearly as worker-friendly as ours. According to the Wall Street Journal and other reports, Chinese automakers are using fewer workers for longer hours and prioritize speed at the risk of vehicle safety. Pace, wages, overtime expectations, and other Western industry operational standards are a significant departure from Chinese manufacturing norms.
There’s also the national security risk at hand. The automotive industry has always been the nation’s largest manufacturing sector, and as Transportation Secretary Sean Duffy noted yesterday at the Auto Show’s public policy days, factories that are used to build cars can be repurposed in times of war. We have to be incredibly strategic about who owns and controls our most capable facilities.
Direct and immediate economic and worker realities aside, we’re also ultimately talking about an existential threat to America’s industrial base by means of software control. China has been relentlessly subsidizing what they call new energy vehicles for over 15 years. They’ve mastered the ability to braid affordable, reliable, fully electric battery technology with highly automated software systems that mirror the capabilities of your cell phone. This software can capture location and movement patterns used to track individuals or facilities, in-cabin and proximity data to track contacts, calendars and microphones, and even the ability to control and disable individual vehicles or entire fleets.
This technology would be owned and operated by companies controlled—and in many cases outright owned—by an authoritarian regime that is considered from all vantages a threat to American prosperity and sovereignty.
It’s in part why, in early 2025, the U.S. Commerce Department finalized a rule to phase in bans on the import of covered connected-vehicle hardware and software with ties to China and Russia. It also restricts the ability of those manufacturers to sell vehicles or operate commercial services in the U.S. The test for this rule is about systems control: What software or hardware is in the vehicle, who assembles it, who is the controlling entity of the assembling entity and, what data privileges exist. SAFE’s Coalition for Reimagined Mobility submitted comments on this rule and highlighted it as a necessary first step in treating connected vehicles as a critical infrastructure with national security risks. Our comments emphasized that the U.S. needs a deliberate playbook for stronger cybersecurity standards, diversified and transparent supply chains, allied cooperation and long-term investment in domestic connected-vehicle capabilities.
Instead of opening the door to Chinese automakers, the U.S. should be unlocking its full potential of global competition through democratic governance. As stated in SAFE’s recent report on the intersection of AI and transportation, if the U.S. does not lead in deploying AI within a framework of public accountability, transparency and rule of law, other nations will advance AI governance norms by their own rules. One of our greatest adversaries is advancing an AI-enabled transportation ecosystem at an unmatched scale, rooted in algorithmic control and centralized surveillance. It’s enough of a threat on foreign shores—but America needs its own advanced transportation technology for competitiveness and security, not allowing an adversary to build a doomsday device within our border.
Unlike 1985, we’re at a once-in-a-generation turning point when looking at how people and goods will continue to move from place to place. As the delta between physical and digital transportation assets shrinks, so does the delta between technology policy and traditional industrial policy. With that comes the need for a coordinated, all-of-the-above federal strategy. One that leads through rules on national security, safety, privacy, and oversight and ensures that the future of the U.S. auto industry, its communities and workers can thrive.
Rachel McCleery brings to SAFE nearly 15 years of experience across the federal government and private sector, most recently serving as a Senior Advisor at the U.S. Treasury Department and Director of U.S. Manufacturing Policy for Ford Motor Company.
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