Automakers urge Congress to quickly ban Chinese vehicles in U.S.

DETROIT — Major automakers operating in the U.S. are increasing pressure on Congress to permanently ban the domestic sale, import and manufacturing of Chinese connected vehicles, hardware and software.

The Alliance for Automotive Innovation, which represents the vast majority of companies selling vehicles in the U.S., urged congressional leaders in a Thursday letter to make a move before the end of Congress’ current session on Jan. 3.

“Right now, Chinese automakers are dumping subsidized vehicles with connected software and hardware around the world,” John Bozzella, CEO of the group, said in the letter seen by CNBC. “This hasn’t happened inside the U.S. yet, but given the scale and urgency of this threat, we urge you to enact a Chinese vehicle, software and hardware ban before adjourning this year and make this policy the law of the land.”

Midterm elections are also coming up in November, which could affect Congress’ momentum.

Bozzella’s comments come amid bipartisan efforts in the House and Senate to address Chinese vehicles, including legislation advanced by the Senate Commerce Committee that could bar Mercedes-Benz from the U.S. market because Chinese investors hold nearly 20% of the German automaker.

The Alliance for Automotive Innovation, which includes Mercedes-Benz, said in the Thursday letter that it wants to work with lawmakers to “achieve a balanced policy so all our member companies continue to succeed and thrive inside the U.S.”

Automakers have been worried that Chinese rivals like BYD and Geely are flooding global markets, undercutting vehicle prices and threatening domestic production. Those China-based companies have been increasing their vehicle exports to Europe and Central and South America.

“Enacting a permanent ban on Chinese vehicles and high-risk hardware and software in the 119th Congress will send a clear and bipartisan message that China’s strategy to dominate global automotive manufacturing will be met with a national security policy response from the American government,” Bozzella said.