The UK government is reportedly deliberating over the possibility of banning Chinese electric vehicle (EV) manufacturers from securing government contracts, citing concerns related to national security and data privacy. The discussions are primarily driven by fears that Chinese EVs, particularly those with wireless components, could potentially pose a threat to the country’s security infrastructure.
The risk of embedded wireless components
A recent report from the Chinese Strategic Risk Institute (CSRI) and the Coalition for Secure Technology highlights that certain wireless components, known as the Cellular IoT Module (CIM), embedded in Chinese EVs could be exploited as a potential tool for malicious purposes. These modules serve as a data passage, allowing two-way communication. This could enable remote control of vehicles, posing a direct security risk if the vehicles are “armed” with capabilities that could block streets or disrupt urban mobility.
The report raised alarms that data generated by Chinese-made EVs operating in the UK could end up in the hands of the Chinese government, potentially facilitating surveillance operations. This is a critical concern given China’s strict policies requiring companies to provide access to data stored within their borders, which can be used for surveillance and other state interests.
Impact on the UK’s domestic automotive industry
One of the central arguments against allowing Chinese EVs to flood the UK market revolves around the potential harm to the domestic automotive industry. The UK’s automotive sector is a key contributor to its economy, employing 198,000 people, or about 2.5% of the country’s GDP. The increasing market share of Chinese EVs in the UK could threaten the viability of local manufacturers, especially as the government accelerates the transition to electric mobility.
The study suggests that the Chinese government’s heavy investment in the EV sector, both in terms of subsidies and manufacturing capacity, has enabled China to produce between five and ten million EVs annually. The lack of import restrictions on Chinese-made vehicles in the UK could open the door for China to expand its influence within the UK’s automotive market, further threatening national security and the domestic industry.
Rapid growth of Chinese EVs in the UK market
Chinese EV manufacturers have made significant inroads into the UK market. Since 2019, the market share of Chinese electric vehicles has skyrocketed, rising from just 2% to 33.4% in the first half of 2023. This rapid growth has raised concerns that the UK could become a “dumping ground” for Chinese EVs, acting as a gateway for further penetration into the European market.
Chinese carmakers such as BYD and MG, both backed by Chinese state-owned companies, have already secured substantial contracts with public sector organizations in the UK. In particular, BYD has delivered over 1,800 electric buses to local authorities in the past few years, while MG, a subsidiary of Chinese automaker SAIC Motor, has supplied electric vehicles to the Ministry of Defence.
Concerns over data privacy and national security
The CSRI report emphasizes that the data generated by these Chinese-made EVs could be sent back to China, potentially compromising the privacy and security of British citizens. China’s totalitarian government mandates that all domestic companies provide state access to their data, a policy that has already led to the UK’s decision to phase out Huawei components from its 5G networks by 2027.
As a solution, CSRI recommends that the UK government impose strict regulations on foreign EV suppliers, requiring them to agree not to send data overseas under any circumstances. The government would also demand access to the original source code of EVs and enforce regular inspections of global data storage centers to ensure that sensitive information is not being covertly transmitted to foreign servers.
A crossroad for UK policy
This report comes at a crucial juncture as the UK government navigates its relationship with China amidst rising geopolitical tensions. The decision to allow or restrict Chinese EV manufacturers will have far-reaching implications not only for national security but also for the country’s economic future in the automotive sector.
The UK’s response to this challenge will likely set a precedent for how other Western nations manage the growing presence of Chinese-made technology within their borders, particularly in industries critical to national security.
