Connected Cars Meet a New Security Reality

New federal rules tighten control over connected vehicle software, reshaping sourcing, governance, and competition across the auto industry

18 Dec 2025

A quiet but consequential shift is taking place across the U.S. automotive and mobility sector. New federal security rules are redefining how connected vehicle software is evaluated, sourced and cleared for market, raising expectations for transparency and control throughout the industry.

At the center of the change is the Commerce Department’s Connected Vehicles Final Rule, administered by the Bureau of Industry and Security. The regulation restricts certain vehicle software and connectivity systems linked to China or Russia, citing national security risks tied to foreign adversary access. While technical in scope, the rule applies broadly to vehicles capable of connecting to external networks, transmitting data or receiving remote software updates.

The regulation is not framed as a consumer privacy measure. Instead, officials have emphasized concerns about foreign influence over systems that could expose sensitive infrastructure, location data or operational capabilities. Vehicles, once largely mechanical products, are now treated as networked technologies with strategic implications. As a result, companies must document software provenance, ownership and control through formal compliance tools such as Declarations of Conformity.

For automakers and suppliers, the rule introduces new operational demands. Software sourcing decisions now carry regulatory weight alongside engineering and cost considerations. Companies must evaluate supplier relationships, governance models and development practices to demonstrate compliance before vehicles reach the market. Oversight of software, long managed within technical teams, is increasingly becoming a board-level issue.

The effects are already visible in procurement and risk management discussions. Technology providers able to demonstrate compliant architectures and U.S.-aligned control structures may gain an advantage as manufacturers seek to limit regulatory exposure. Investors are also paying closer attention to software governance, export controls and security posture when assessing automotive and mobility technology firms.

Industry analysts see the rule as part of a broader shift. Governments are increasingly treating connected vehicles as critical digital infrastructure rather than consumer electronics. In that environment, security compliance is evolving from a procedural requirement into a competitive differentiator.

Looking ahead, the Connected Vehicles Final Rule may serve as a template for future oversight. As vehicles grow more connected and automated, scrutiny of software control and security is likely to intensify. The changes could shape how trust, governance and competitiveness are defined in the next phase of software-driven transportation.