Trump administration permits Volvo to keep selling connected cars in the US

Source: TechCrunch

Background

In January 2025 the Biden administration finalized rules that block vehicles equipped with software and hardware developed and maintained by Chinese companies over national‑security concerns. The rules, Securing the Information and Communications Technology and Services Supply Chain: Connected Vehicles, apply to 2027 model‑year vehicles with Chinese‑developed software and to 2030 model‑year vehicles with Chinese‑developed connected hardware. They also prohibit Chinese companies from testing autonomous vehicles in the United States.

Volvo’s exemption

Volvo Cars announced that it has received a specific authorization from the U.S. Department of Commerce allowing the automaker to continue importing and selling vehicles that contain Chinese‑connected‑car technology in the United States. The exemption follows “constructive discussions” with the Commerce Department and other U.S. officials regarding Volvo’s governance, technology, and data‑security practices.

Volvo, which is majority‑owned by China’s Geely Holding, would otherwise have been subject to the ban because of its ties to Geely and its manufacturing operations in China. Most Volvo vehicles are built in Sweden and imported to the U.S., with the EX90 assembled at the company’s South Carolina factory.

Expansion plans

In September 2025 Volvo announced plans to add two more models—the XC60 midsize SUV and a new hybrid vehicle—to production at the South Carolina plant. In March 2025 the company also said it will shift all production of the Polestar 3 (an EV from its sister brand Polestar) to the U.S. factory; the model is currently also produced in Chengdu, China.

Regulatory context

The rule cited above spends considerable time on the threat posed by automated‑driving systems developed by companies with Chinese ties. Under the regulations, Chinese firms are barred from testing autonomous vehicles in the United States. Currently, several Chinese‑owned companies—including Baidu’s Apollo Autonomous Driving LLC, Pony.ai, and WeRide—hold permits to test autonomous‑vehicle technology (with a human safety operator) in California. The status of these permits remains under review.