The U.S. may place a ban on Chinese software in self-driving and connected vehicles, with the Biden administration expected to propose such rules in the coming weeks.
According to a report from Reuters citing sources briefed on the matter, the U.S. Commerce Department is looking to propose banning Chinese software in autonomous and connected vehicles this month. The rule would ban any Chinese software in U.S. vehicles with Level 3 or higher autonomous capabilities, effectively banning self-driving tests for companies from China.
Level 3 autonomous driving would allow drivers to take their focus off the road and even perform other activities unless otherwise prompted to take over driving by the vehicle. The sources also say the rule would require automakers and suppliers to confirm to regulators that their connected vehicle and Level 3 software platforms weren’t developed in a “foreign entity of concern,” such as China.
On Sunday, a spokesperson from the Commerce Department said the agency was “concerned about the national security risks associated with connected technologies in connected vehicles.”
Chinese self-driving developer reportedly files for IPO in the US
The rule is expected to come from the department’s Bureau of Industry and Security, and the department says that the requirement “will focus on specific systems of concern within the vehicle,” adding that “industry will also have a chance to review that proposed rule and submit comments.”
The Commerce Department initially said last month that it was considering imposing certain limits on some Chinese software, as well as those from other countries considered adversaries.
“Only division of labor and cooperation can bring mutual benefits, and only fair competition can bring technological progress,” said a spokesperson from the Chinese embassy in Washington D.C. in response to the expected proposal “China urges the U.S. to earnestly abide by market principles and international trade rules, and create a level playing field for companies from all countries. China will firmly defend its lawful rights and interests.”
Last Wednesday, the White House and State Department held a meeting with officials from around the world to “jointly address the national security risks associated with connected vehicles,” according to the department. The meeting also included details about the administration’s plans to propose the rule.
The conference included officials from the U.S., Canada, Australia, the European Union (EU), the United Kingdom (UK), Germany, Spain, India, South Korea, and Japan, who “exchanged views on the data and cybersecurity risks associated with connected vehicles and certain components.”
The topic of national security risks surrounding connected vehicles has been around for quite some time, with a group of legislators last November bringing forward concerns that Chinese companies could collect and misuse sensitive data in autonomous vehicle tests.
“The national security risks are quite significant,” said Gina Raimondo, Commerce Secretary, in a statement in May. “We decided to take action because this is really serious stuff.”
The news comes after the U.S. increased tariffs on Chinese electric vehicles (EVs) in May, in order to stave off cheap competitors to U.S.-built products. The EU lodged also launched tariffs on Chinese EVs last month, and Canada is considering similar legislation.
It also comes as multiple companies have gained approval to test autonomous driving tech in China, including domestic makers Nio, BYD, Changan Auto, GAC, SAIC, BAIC BluePark, China FAW Group, SAIC Hongyan, and Yutong Bus. Over the weekend, Mercedes-Benz became the first foreign company to gain approval for Level 4 autonomous driving tests in China, and Tesla is expected to gain full approval for its Full Self-Driving (FSD) Supervised later this year.
Tesla China to test 10 FSD vehicles ahead of expected public rollout: report
What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send us tips at tips@teslarati.com.
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I subscribed to Tesla Full Self-Driving after four free months: here’s why
It has been incredibly valuable to me, and that is what my main factor was in considering whether to subscribe or not. It has made driving much less stressful and much more enjoyable.
I have been lucky enough to experience Tesla Full Self-Driving for the entire duration of my ownership experience for free — for four months, I have not had to pay for what I feel is the best semi-autonomous driving suite on the market.
Today, my free trial finally ran out, and I had two choices: I could go without it for a period until I felt like I absolutely needed it, or I could subscribe to it, pay $99 per month, and continue to experience the future of passenger transportation.
I chose the latter, here’s why.
Tesla Full Self-Driving Takes the Stress Out of Driving
There are a handful of driving situations that I don’t really enjoy, and I think we all have certain situations that we would just rather not encounter. This is not to say that I won’t ever experience them as someone who has driven a car for 15 years (it feels weird saying that).
I don’t love to drive in cities; I really don’t like driving on I-695 on my way to Baltimore, and I truly hate parallel parking. All three things I can do and have done, all three within the past few weeks, too.
It takes all the stress out of city driving pic.twitter.com/q0SPPrH4HU
— TESLARATI (@Teslarati) December 4, 2025
However, if I can avoid them, I will, and Tesla Full Self-Driving does that for me.
Tesla Full Self-Driving Eliminates the Monotony
I drive to my alma mater, Penn State University, frequently in the Winter as I am a season ticket holder to Wrestling and have been for 16 years now.
The drive to State College is over two hours and over 100 miles in total, and the vast majority of it is boring as I travel on Rt 322, which is straight, and there is a lot of nature to look at on the way.
I am willing to let the car drive me on that ride, especially considering it is usually very low traffic, and the vast majority of it is spent on the highway.
The drive, along with several others, is simply a boring ride, where I’d much rather be looking out the windshield and windows at the mountains. I still pay attention, but having the car perform the turns and speed control makes the drive more enjoyable.
Tesla Full Self-Driving Makes Navigating Easier
Other than the local routes that I routinely travel and know like the back of my hand, I’ve really enjoyed Full Self-Driving’s ability to get me to places — specifically new ones — without me having to constantly check back at the Navigation.
Admittedly, I’ve had some qualms with the Nav, especially with some routing and the lack of ability to choose a specific route after starting a drive. For example, it takes a very interesting route to my local Supercharger, one that nobody local to my area would consider.
But there are many times I will go to a new palce and I’m not exactly sure where to go or how to get there. The Navigation, of course, helps with that. However, it is really a luxury to have my car do it for me.
To Conclude
There was no doubt in my mind that when my Full Self-Driving trial was up, I’d be subscribing. It was really a no-brainer. I am more than aware that Full Self-Driving is far from perfect, but it is, without any doubt, the best thing about my Tesla, to me.
It has been incredibly valuable to me, and that is what my main factor was in considering whether to subscribe or not. It has made driving much less stressful and much more enjoyable.
🚨 How I’ve gotten Tesla Full Self-Driving for free…until now
Watch me subscribe to Tesla FSD! https://t.co/bjK7EEOptR pic.twitter.com/cs5CmN5PdJ
— TESLARATI (@Teslarati) January 7, 2026
The Tesla Diner has been subject to many points of criticism since its launch in mid-2025, and skeptics and disbelievers claim the company’s latest novel concept is on its way down, but there’s a lot of evidence to state that is not the case.
The piece cites anecdotal evidence like empty parking lots, more staff than customers during a December visit, removed novelty items, like Optimus robot popcorn service and certain menu items, the departure of celebrity chef Eric Greenspan in November 2025, slow service, high prices, and a shift in recent Google/Yelp reviews toward disappointment.
The piece frames this as part of broader Tesla struggles, including sales figures and Elon Musk’s polarizing image, calling it a failed branding exercise rather than a sustainable restaurant.
This narrative is overstated and sensationalized, and is a good representation of coverage on Tesla by today’s media.
Novelty Fade is Normal, Not Failure
Any hyped launch, especially a unique Tesla-branded destination blending dining, Supercharging, and a drive-in theater, naturally sees initial crowds taper off after the “Instagram effect” wears down.
Tesla makes major change at Supercharger Diner amid epic demand
This is common for experiential spots in Los Angeles, especially pop-up attractions or celebrity-backed venues. The article admits early success with massive lines and social media buzz, but treats the return to normal operations as “dying down.”
In reality, this stabilization is a healthy sign of transitioning from hype-driven traffic to steady patronage.
Actual Performance Metrics Contradict “Ghost Town” Claims
- In Q4 2025, the Diner generated over $1 million in revenue, exceeding the average McDonald’s location
- It sold over 30,000 burgers and 83,000 fries in that quarter alone. These figures indicate a strong ongoing business, especially for a single-location prototype focused on enhancing Supercharger experiences rather than competing as a mass-market chain
It’s not a ghost town lol. The @Tesla Diner still had over 30,000 burger orders and 83,000 fries orders in Q4. The diner generated over $1M in revenue in Q4, a $4M annual run rate, which is more than the average McDonald’s…. pic.twitter.com/XvAGLUqxej
— Sawyer Merritt (@SawyerMerritt) January 4, 2026
Conflicting On-the-Ground Reports
While the article, and other similar pieces, describe a half-full parking lot and sparse customers during specific off-peak visits, other recent accounts push back:
- A January 2026 X post noted 50 of 80 Supercharger stalls were busy at 11 a.m., calling it “the busiest diner in Hollywood by close to an order of magnitude
TESLA DINER 🍔
Frantic!!!
Crazy busy. pic.twitter.com/wMbmr8SFFn
— Rich & Sharon (@HullTeslaModel3) January 4, 2026
- Reddit discussions around the same time describe it as not empty when locals drive by regularly, with some calling the empty narrative “disingenuous anti-Tesla slop.”
When we visited it last week it was packed. We had to wait to enter, get a table and go to the restroom. We were lucky to find a spot to charge.
— Rani G (@ranig) January 4, 2026
Bottom Line
The Tesla Diner, admittedly, is not the nonstop circus it was at launch–that was never sustainable or intended. But, it’s far from “dying” or an “empty pit stop.”
It functions as a successful prototype: boosting Supercharger usage, generating solid revenue, and serving as a branded amenity in the high-traffic EV market of Los Angeles.
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Tesla stands to win big from potential adjustment to autonomous vehicle limitations
Enabling scale, innovation, and profitability in a sector that is growing quickly would benefit Tesla significantly, especially as it has established itself as a leader.
Tesla stands to be a big winner from a potential easing of limitations on autonomous vehicle development, as the United States government could back off from the restrictions placed on companies developing self-driving car programs.
The U.S. House Energy and Commerce subcommittee will hold a hearing later this month that will aim to accelerate the deployment of autonomous vehicles. There are several key proposals that could impact the development of self-driving cars and potentially accelerate the deployment of this technology across the country.
These key proposals include raising the NHTSA’s exemption cap from 2,500 to 90,000 vehicles per year per automaker, preempting state-level regulations on autonomous vehicle systems, and mandating NHTSA guidelines for calibrating advanced driver assistance systems (ADAS).
Congress, to this point, has been divided on AV rules, with past bills like the 2017 House-passed measure stalling in the Senate. Recent pushes come from automakers urging the Trump administration to act faster amid competition from Chinese companies.
Companies like Tesla, who launched a Robotaxi service in Austin and the Bay Area last year, and Alphabet’s Waymo are highlighted as potential beneficiaries from lighter sanctions on AV development.
The NHTSA recently pledged to adopt a quicker exemption review for autonomous vehicle companies, and supporters of self-driving tech argue this will boost U.S. innovation, while critics are concerned about safety and job risks.
How Tesla Could Benefit from the Proposed Legislation
Tesla, under CEO Elon Musk’s leadership, has positioned itself as a pioneer in autonomous driving technology with its Full Self-Driving software and ambitious Robotaxi plans, including the Cybercab, which was unveiled in late 2024.
The draft legislation under consideration by the U.S. House subcommittee could provide Tesla with significant advantages, potentially transforming its operational and financial landscape.
NHTSA Exemption Cap Increase
First, the proposed increase in the NHTSA exemption cap from 2,500 to 90,000 vehicles annually would allow Tesla to scale up development dramatically.
Currently, regulatory hurdles limit how many fully autonomous vehicles can hit the roads without exhaustive approvals. For Tesla, this means accelerating the rollout of its robotaxi fleet, which Musk envisions as a network of millions of vehicles generating recurring revenue through ride-hailing. With Tesla’s vast existing fleet of over 6 million vehicles equipped with FSD hardware, a higher cap could enable rapid conversion and deployment, turning parked cars into profit centers overnight.
Preempting State Regulations
A united Federal framework would be created if it could preempt State regulations, eliminating the patchwork of rules that currently complicate interstate operations. Tesla has faced scrutiny and restrictions in states like California, especially as it has faced harsh criticism through imposed testing limits.
A federal override of State-level rules would reduce legal battles, compliance costs, and delays, allowing Tesla to expand services nationwide more seamlessly.
This is crucial for Tesla’s growth strategy, as it operates in multiple markets and aims for a coast-to-coast Robotaxi network, competing directly with Waymo’s city-specific expansions.
Bringing Safety Standards to the Present Day
Innovation in the passenger transportation sector has continued to outpace both State and Federal-level legislation, which has caused a lag in the development of many things, most notably, self-driving technology.
Updating these outdated safety standards, especially waiving requirements for steering wheels or mirrors, directly benefits Tesla’s innovative designs. Tesla wanted to ship Cybertruck without side mirrors, but Federal regulations required the company to equip the pickup with them.
Cybercab is also planned to be released without a steering wheel or pedals, and is tailored for full autonomy, but current rules would mandate human-ready features.
Streamlined NHTSA reviews would further expedite approvals, addressing Tesla’s complaints about bureaucratic slowdowns. In a letter written in June to the Trump Administration, automakers, including Tesla, urged faster action, and this legislation could deliver it.
In Summary
This legislation represents a potential regulatory tailwind for Tesla, but it still relies on the government to put forth action to make things easier from a regulatory perspective. Enabling scale, innovation, and profitability in a sector that is growing quickly would benefit Tesla significantly, especially as it has established itself as a leader.
I subscribed to Tesla Full Self-Driving after four free months: here’s why
Tesla Diner becomes latest target of gloom and doom narrative
