Series 17 – Episode 7 – latest trends on Chinese EVs and potential security risks

China's rapid expansion into the European electric vehicle market has raised significant economic, geopolitical, and security concerns.

One of the key concerns Cuozzo raised was the economic impact on European automakers. He noted that Chinese EV manufacturers benefit from substantial state subsidies, which allow them to offer vehicles at competitive prices. Meanwhile, European carmakers must adhere to stricter environmental regulations, leading to an uneven playing field.

Germany, in particular, has been resistant to imposing trade restrictions on Chinese EVs due to its economic dependence on exports to China. Cuozzo pointed out that German policymakers initially viewed China as a long-term trade partner but are now facing the consequences of an unbalanced relationship. "Germany opposed restrictions on Chinese EV imports for years, believing China would remain a major customer. Now, Chinese consumers are buying fewer German cars, and the European market is flooded with subsidised competition," he said.

Beyond the economic factors, Cuozzo warned of significant security risks associated with Chinese EVs. Modern cars are equipped with advanced sensors, cameras, and data collection systems that could be exploited for intelligence gathering.

"We are essentially allowing moving surveillance devices onto European roads," he said. "These cars collect vast amounts of geolocation data, building layouts, and even pedestrian movement patterns. That data can be transmitted and analysed in China, posing a major security risk."

He highlighted the lack of transparency in Chinese software ecosystems, which differ from European automotive software in critical ways. "Chinese manufacturers follow Tesla’s model, developing software in-house, rather than relying on third-party suppliers. The issue is that there is little oversight of what this software does or how it collects and transmits data," he noted.

Despite these risks, Cuozzo believes European regulators have been slow to act. "Many European governments fear Chinese retaliation in the form of tariffs on European exports," he said. "Germany, in particular, is in a weak economic position and cannot afford to provoke a trade war with China."

He urged Europe to adopt a more protectionist stance on its EV industry. "The US and China have both implemented aggressive policies to protect their own industries. Europe needs to do the same if it wants to remain competitive," he said.

From a cybersecurity perspective, Cuozzo stressed the need for tighter supply chain controls and better vetting of software components in connected vehicles. "Right now, we are integrating firmware and drivers from unknown sources. Automakers must ensure that every component in their vehicles is properly vetted to prevent potential security threats," he advised.

As Chinese EVs continue to gain traction in Europe, policymakers and industry leaders must weigh the economic benefits against the broader geopolitical and security implications. Cuozzo’s warning underscores the urgency of addressing these challenges before Europe becomes overly reliant on foreign-controlled EV technology.

To hear more about the Chinese EV market, you can listen to Electronic Specifier’s interview on Spotify or Apple podcasts.