The race to remove Chinese-made connected-car hardware from US vehicles has begun years before federal deadlines arrive, forcing automakers and suppliers to rebuild critical automotive supply chains while preparing for higher production costs.
At a factory in Solon, Ohio, Eagle Wireless is rapidly expanding production of wireless connectivity modules, the small electronic boards that allow vehicles to communicate with the outside world. The company was created in late 2025 largely in response to U.S. rules banning certain Chinese vehicle software beginning with 2027 models and Chinese-designed hardware from the 2030 model year.
“There’s a massive opportunity for us,” Eagle Wireless President TJ Dembinski said, adding that demand has surged as automakers prepare years in advance for future vehicle programs.
National security rules drive automotive manufacturing shift
The federal regulations, introduced under former President Joe Biden and maintained by the Trump administration, were designed to address national security and data privacy concerns surrounding connected vehicles.
For automakers, compliance means finding alternative suppliers long before the deadlines arrive. Eagle Wireless said it expects annual revenue to nearly double to almost $100 million this year while growing from roughly 140 employees today to about 1,000 workers over the next three years.
The broader industry is also reducing reliance on Chinese suppliers as geopolitical tensions reshape sourcing strategies across automotive technology, battery materials and other critical components.
Hilary Cain, senior vice president of policy at the Alliance for Automotive Innovation, said the rule “requires a deep examination of supply chains and aggressive compliance timelines.”
Higher costs challenge auto suppliers
Replacing Chinese-made components will not come cheaply. Eagle Wireless said its modules currently cost between 5% and 15% more than comparable Chinese products as it works toward price parity.
Industry executives also say automakers are demanding greater visibility into supplier networks to ensure prohibited Chinese components are removed before production begins.
Matt Wyckhouse, chief executive of cybersecurity company Finite State, said satellite communication systems, antennas and other connectivity hardware are among the products most affected by the new rules.
Race for technology independence
Despite positioning itself as a U.S.-compliant supplier, Eagle Wireless still faces its own transition.
The company initially licensed module designs from China’s Quectel Wireless Solutions and must replace that technology with its own before the 2030 deadline.
“We’ll embrace all the tools that we can possibly have,” Eagle technology chief Joel Young said as engineers work to develop replacement products.
According to Counterpoint Research, Chinese suppliers account for nearly half of global automotive cellular IoT module shipments, highlighting the scale of the industry’s effort to diversify sourcing.
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