The Chinese EV standard winning globally is banned in the U.S. - Rest of World

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By Indranil Ghosh

6 May 2026

New rules banning Chinese software in cars could cut American automakers off from the technology ecosystem dominating global markets.<br>Companies like BYD design batteries, chips, and software in-house, enabling faster production, lower costs, and tighter system integration.<br>Shielded from Chinese competition at home but disconnected globally, U.S. firms could fall behind in cost, speed, and innovation.

Much of the world is adopting the electric-vehicle technology the U.S. just banned.

On March 17, the U.S.banned any vehicle with Chinese software from its roads. Beginning with cars arriving at dealerships this July, every automaker selling in the U.S. must certify that its connected systems contain no Chinese-developed code.

Chinese EV companies are the market leaders in much of the world. BYDiBYDBYD Auto is a Chinese carmaker that became the world’s leading EV manufacturer in 2023, competing with Tesla for market share and global attention.READ MORE is the top-selling EV maker globally, outselling Tesla and Ford in many markets. The U.S.’ move in the opposite direction may cut off its automakers from the technology the rest of the world is adopting, analysts and industry executives told Rest of World.

If U.S. automakers “are shielded from Chinese competition at home but are not competitive on cost, speed, or intelligence abroad, they risk becoming regionally relevant rather than globally formative,” said Bill Russo, CEO of Shanghai-based consultancy Automobility Limited and a former Chrysler executive who has spent 21 years advising automakers in China.

U.S. policy circles maintain that the bans do not amount to isolation. The country’s automakers can study Chinese technology in China, according to the Information Technology and Innovation Foundation, a Washington think tank that advises the U.S. government on competitiveness.

“It doesn’t restrict U.S. companies from conducting R&D or technology scouting activities in China,” Stephen Ezell, the foundation’s vice president for global innovation policy, told Rest of World. The restrictions are justified because the Chinese EV industry was built on “IP theft, massive industrial subsidization, forced technology transfer,” he said.

Ford tried to go further than scouting. The company began talks with China’s Geely in 2025 about licensing Chinese EV technology for the U.S. market, but walked away after concluding a collaboration would be “politically fraught,” according to a report on April 24. Ford has denied the talks.

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Two different cars

Chinese EV makers, led by BYD, have built an integrated system. The company designs the battery, makes the chips, and writes the software, so every part of the car works together.

U.S. automakers, meanwhile, operate a fragmented system where companies such as Ford, GM, and Tesla buy their technology from different vendors, making it impossible to build EV infrastructure around a single acceptable standard.

BYD makes roughly 75% of its components in-house, including its own lithium iron phosphate battery cells, the chips that manage power and charging, and the software platform for the cars. Chinese rivals, including XPeng, Chery, Geely, and Li Auto, have adopted the same integrated approach, designing their own software and electronics.

By contrast, when a consumer buys a Ford EV, Google runs the dashboard screen, BlackBerry provides the brakes and steering software, and the battery comes from a factory in South Korea or China.

Tesla is the one U.S. automaker that writes its own software, but its system is proprietary, meaning no other company or country can adopt it as a shared standard. The company, meanwhile, buys batteries from Japan’s Panasonic and China’s CATL, the world’s largest battery maker.

Where roads split

The divergence between Chinese and U.S. EVs is widest in batteries and charging, two areas where global standards are being set right now.

The world is moving toward lithium iron phosphate, the battery chemistry used by BYD and CATL. It is cheaper, safer, and lasts longer than the nickel-based batteries most U.S. automakers rely on. Beijing will release a national standard for solid-state batteries in July, the next generation of cells that promise ranges of 965 kilometers (over 600 miles).

Even something as basic as the charging plug has split three ways, with North America, Europe, and China each using a different one.

China and Japan are jointly developing a next-generation plug called ChaoJi that can handle almost four times the power of NACS, the North American charging standard that Tesla designed, according to the ChaoJi consortium. If ChaoJi is adopted globally, U.S. cars would be stuck charging on a slower, older system.

The gap in self-driving technology is growing also because these systems improve by...