One of the most challenging aspects of the Connected Vehicle Rule (CVR) lies in understanding exactly how the rule defines what’s covered, and more critically, what’s prohibited.
The draft rule uses broad language to describe the types of technologies and ownership structures that fall under its scope. But in practice, the terms “owned or controlled by,” “directly enable,” and “critical technologies” are deeply complex, especially when applied to global automotive supply chains and embedded software.
For OEMs and suppliers trying to take action, the ambiguity creates a dangerous gap: the risk of either doing too little and falling out of compliance, or doing too much and unnecessarily derailing supply chains.
In this blog, we’ll walk through the key gray areas in the CVR’s definitions and offer guidance on how manufacturers can interpret them proactively and defensibly.
The CVR bans the use of certain technology from entities “owned, controlled by, or subject to the jurisdiction or direction of a foreign adversary.” On paper, this may sound straightforward. In reality, it launches us into a labyrinth of questions.
Does “ownership” only mean a controlling interest, i.e., more than 50% of voting shares? Or could a minority stake (or special voting rights) from a PRC investment fund raise concerns? What about parent companies headquartered in neutral countries but operating development teams or subsidiaries in China or Russia?
And what constitutes “control”? Is it legal control? Strategic influence? Access to the source code or the ability to alter development roadmaps?
The Department of Commerce has offered few specifics, which means companies must rely on risk-informed judgment. At Finite State, we encourage our partners to document:
While full transparency isn’t always available, showing that you attempted to assess ownership and control can be critical in demonstrating good-faith compliance.
Another ambiguous concept in the CVR is the notion of “directly enabling” a vehicle’s connectivity, remote operation, or autonomous functionality. This matters because the CVR applies specifically to components that fall into this category.
But in modern vehicle architectures, software layers are deeply interconnected. A seemingly innocuous driver or middleware module could have a role in enabling remote data transfer or could become a vector for adversarial control.
For example, does a Bluetooth driver that connects to a mobile app count as “directly enabling” connectivity? What about a firmware update mechanism that touches a telematics control unit? Or a security module that encrypts outbound data?
Rather than waiting for regulators to define the line, we recommend a functional analysis approach. Evaluate components not just based on their labeled purpose, but on how they interact with systems that communicate externally or perform remote functions. If a piece of code plays a non-trivial role in those pathways, it may fall within scope.
And when in doubt, document your rationale and flag it for further review.
Beyond ownership and formal control, the CVR also raises concerns about who can influence development and from where. In today’s globally distributed software environment, jurisdiction is a key variable.
Many suppliers serving the automotive industry are global enterprises. They may have development teams in multiple countries, production facilities in the U.S., and legacy code originating from open-source communities around the world.
In these cases, determining whether a component is “subject to the jurisdiction or direction” of a foreign adversary is far from clear-cut. Does code written by a team in Shenzhen automatically fall under the PRC’s jurisdiction, even if the company is registered in Germany? What if that code was merged into an open-source project now maintained by contributors in 20 different countries?
This is where context and lineage matter. The CVR’s enforcement is likely to focus on components where influence or access could plausibly be exerted today, not just where the code originated. But without clear rules, companies need to trace:
Finite State’s platform, for example, enables users to correlate binary and source code components with vendor data, development geography, and licensing history, adding the context that CVR compliance demands.
These questions of ownership and influence become even murkier in the context of joint ventures and OEM-controlled suppliers. While these relationships may fall short of direct foreign ownership, they can still introduce risks that the CVR appears designed to address.
For example, what happens when an automaker uses components developed by a joint venture partially owned by a Chinese state-affiliated company? Or when a U.S. OEM has spun out a supplier but retains partial control over its IP?
These structures are common in the automotive space, especially in emerging areas like connectivity and autonomy. Yet they may introduce exposure that’s hard to classify using binary rules.
Companies facing these situations will need to assess:
These aren’t easy questions. But they’re the questions the CVR is pushing the industry to ask and to answer with transparency and traceable decision-making.
The common thread through all these ambiguities is this: there may not be a single “correct” interpretation, but there is a defensible one.
What regulators will look for is not perfection, but process. Are you asking the right questions? Are you escalating edge cases? Are you documenting the rationale behind your inclusion and exclusion decisions?
Companies that rely solely on supplier attestations or limit their reviews to first-party software are unlikely to meet the CVR’s standard for reasonable diligence. Those that build internal review processes, engage cross-functional teams, and incorporate threat intelligence into their analysis are far better positioned to withstand scrutiny.
It is possible that the Department of Commerce may release additional guidance or FAQs at a later date. But by then, the clock will be ticking toward enforcement deadlines, and the time needed to perform these nuanced assessments may be gone.
Starting now gives you time to navigate these gray areas with care. It also helps build the institutional knowledge your teams will need to manage CVR compliance at scale.
At Finite State, we help OEMs and suppliers move from regulatory ambiguity to action. Our platform provides deep insight into component origin, development lineage, and software behavior so you can evaluate CVR exposure even when definitions are fuzzy.
Our advisory services support nuanced interpretations, scenario planning, and documentation reviews, turning “we’re not sure” into “here’s how we’re handling it.”
Start building a defensible compliance strategy today with the tools, context, and expert guidance to back it up.
Book a demo to see how we help you make confident, audit-ready decisions under the CVR.