Chinese electric vehicles present a backdoor risk for Beijing to gain leverage over rival governments, a new report warns.
The think tank China Strategic Risks Institute (CSRI) published an analysis called “Under-Pricing Chinese EV risks in the UK” that reached very similar conclusions as the Biden administration earlier this year: Cars from China pose a threat to national security.
The CSRI said Chinese manufacturers dominate the market for Cellular Internet of Things Modules (CIMS). These embedded devices transmit information via radio signals to and from external sources.
When an EV gets live traffic information from smart traffic lights, looks up data on the nearest charging point, or receives a software update, it does so through such CIMs.
The problem is these present an inherent vulnerability in cybersecurity since they can be remotely accessed and operated.
“The [People’s Republic of China] has a long track record of weaponizing supply-chain dependencies to economically coerce partners,” it says, arguing for the UK to follow the U.S., Canada and the European Union in imposing punitive tariffs on Chinese EVs.
Fortune reached out to the Chinese Embassy in the UK for comment but had no response.
Until now, no extra duties have been imposed on cars from China, helping drive volumes for brands like MG, part of Shanghai's SAIC Motor.
It’s not just cars either—these devices are also installed in charging networks.
The report argues that this means they could, in theory, be switched off from one moment to the next, leaving drivers stranded without power.
The think tank recommended imposing automatic bans in the UK for companies unwilling to share their source code or provide evidence regarding data storage globally.
Furthermore, any Chinese CIM manufacturers suspected of having ties with the PRC’s military-industrial complex, as well as Chinese EV producers from public procurement contracts, should be banned from participating in government procurement tenders under the UK's Procurement Act.
Risk is low, but 'few are aware of the threat'
While the report said the risks of Beijing sowing chaos on western roads are low, it recommends that responsible governments plan for the worst.
In the past, this argument might have appeared flimsy, especially since the think tank appears to conflate its demands for cybersecurity safeguards with a desire to protect the over 182,000 UK manufacturing jobs provided by the automotive industry.
However, geopolitical stability has shot to the top of CEOs’ agendas, a recent Fortune/Deloitte survey found.
While heightened by the nearly year-long war in Gaza, the world order was first thrown into turmoil after Vladimir Putin broke international law and invaded his neighbor, Ukraine.
This occurred only after the Kremlin first provided Europe—and Germany in particular—with a steady supply of cheap Russian natural gas through the Nord Stream pipeline.
Putin wielded this dependency as a weapon against Europe, a continent that eventually was forced to bid fuel and energy prices on the global market higher just to keep the lights on for its economy.
“Future hostilities are not out of the question, particularly with the PRC’s militarization of the South China Sea and military tensions within the Taiwan Strait,” the CSRI argued.
In fact, the think tank argued that these risks increase should Western governments repeat the same mistake they made with Russia by relying on products from a system rival.
The UK-based CSRI think tank, which focuses on the risks posed by China’s rising authoritarianism, published Monday’s report with the support of the Coalition on Secure Technology, a campaign that seeks to raise awareness of the risks posed by Chinese CIMs.
“Few are aware of the threat posed by Chinese-made Cellular Interet of Things Modules, the small devices increasingly found at the heart of modern technology.” wrote Baroness Natalie Jessica Evans, then the chair of the Coalition, in March. “Little tangible action has so far been taken. This needs to change.”
