Pirelli risks sale restrictions in US due to Chinese investor

The U.S. is cracking down on Chinese technology in the automotive industry.

The United States has warned tyre maker Pirelli that it could restrict sales of tyres fitted with its data-collecting technology. The restrictions could extend to vehicles fitted with this technology as well.

The reason for the above is due to a Chinese investor in the tyre company. Italy's Pirelli, whose largest shareholder with a 37% stake is Chinese state group Sinochem, has developed technology allowing data from its so-called Cyber Tyres to be collected and transferred in real-time to the vehicle.

The U.S. is cracking down on Chinese technology in the automotive industry, banning key software and hardware from Chinese-controlled companies in connected vehicles on U.S. roads.

An informal advisory was issued to Pirelli by the Commerce Department's Bureau of Industry and Security. The letter also said that carmakers that incorporated the Cyber Tyre tech in their vehicles would likely need to apply for an exemption to sell them in the U.S.

Pirelli and its second-largest investor, Camfin, have entered into a dispute with Sinochem, claiming Sinochem's leading shareholding position in Pirelli was hindering the group's ability to expand its business in the U.S.

Pirelli makes around 25% of its revenue in North America, mostly through plants in Mexico, South America and Europe, although it also runs a smaller facility in the U.S. state of Georgia.

It seems to be a rocky road ahead for Pirelli for now. The software prohibitions by the United States will take effect in the 2027 model year, while those on hardware will come in 2029.

Source: Reuters