SOLON, Ohio, July 21 (Reuters) – A nondescript facility south of Cleveland has become an early staging ground for the auto industry's next supply-chain pivot: replacing vehicle hardware from China.
The plant belongs to Eagle Wireless, a maker of electronics that was formed in late 2025, largely in response to a federal rule that bans certain Chinese connected-car software and hardware in U.S. vehicles by the end of the decade.
"There's a massive opportunity for us," said TJ Dembinski, president of Eagle Wireless. He said Eagle grew out of a need to counter China's dominance in modules, which he knew would be challenging for U.S. automakers as the regulations took effect.
It's been a mad dash to scale up production of modules, the small circuit boards that enable vehicles to have a wireless connection to the outside world. Eagle started with about 140 employees and is aiming to grow to 1,000 in the next three years. Its revenue expectations have increased by almost 100% for the year, to nearly $100 million.
"It's been insane," Dembinski said.
The connected-vehicle rules were adopted in January 2025 under U.S. President Joe Biden, based on national security concerns around data privacy, and have been kept in place under the Trump administration. They prohibit the use of Chinese connectivity software starting in the 2027 model year, and hardware from model-year 2030. Though those deadlines may seem far off, automakers plan vehicle programs years in advance, meaning compliant suppliers must be locked in now.
Amid heightened geopolitical tensions and unpredictable trade wars, auto companies are in the middle of a disruptive uncoupling from China, on everything from inexpensive components – like Eagle's modules – to battery materials and essential rare earth minerals.
Industry concerns around complying with the regulations were heightened after electric-vehicle maker Polestar, which is majority owned by China's Geely Holding, was banned last month from new-vehicle sales in the U.S. under the rule.
The components most affected under the hardware rule include satellite communications systems, external antennas and other microcontrollers that enable a vehicle's external communication, said Matt Wyckhouse, CEO of security firm Finite State and an adviser to Eagle Wireless.
Migrating parts supply away from China typically represents a significant cost increase. One former Detroit executive said when they compared the cost of a non-China automated-driving system with one using Chinese tech, including LiDAR, they were floored.
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