WASHINGTON, Sept 23 (Reuters) -

General Motors ( GM ) and Ford Motor ( F ) would need to

stop importing vehicles to the U.S. from China under a proposed

rule cracking down on Chinese software and hardware, a U.S.

Commerce Department official told Reuters Monday.

The rule would also affect other automakers selling or

building vehicles in the U.S., such as Volvo Cars and BYD.

GM sells the Buick Envision and Ford sells the Lincoln

Nautilus -- both assembled in China -- in the U.S. market. Ford

did not comment. In the first six months of 2024, GM sold about

22,000 Envisions and Ford sold 17,500 Nautilus SUVs in the U.S.

"We anticipate at this point that any vehicle that is

manufactured in China and sold in the U.S. would fall within the

prohibitions," said Liz Cannon, who heads the Commerce

Department's information and communications technology office.

GM and Ford are aware, she added, that "going forward" that

production in China for the U.S. market "would need to be shut

down in China and moved elsewhere."

GM did not address if it thought it would have to halt

sales of the Envision but added the "government has an important

role to set clear policies" on security issues.

Commerce said it would allow companies to seek a "specific

authorization" to continue sales of vehicles or components.

China's BYD North America, a unit of BYD,

which builds electric buses in Lancaster, California could be

impacted. The company did not immediately comment.

"We will have to work with them to better understand

their supply chain," Cannon said. "They will have to come in for

a specific authorization."

For example, software would likely be prohibited if it

were developed by a team of Chinese employees in that country

for a Chinese automaker. But software would likely be allowed if

it were developed by Chinese employees working in another

country for a non-Chinese company.

Reuters reported in May

four Chinese vehicle models are sold in the U.S.

including the Polestar 2 and Volvo's S90 sedans. Polestar

and Volvo are affiliates of Chinese automaker Geely.

Cannon said she expects companies like Volvo will meet

with Commerce "to work with us to talk about ways that they

could mitigate the risk and we are open to that" and the agency

could grant them an authorization.

Volvo Cars said "We are reviewing the proposal from the

U.S. Commerce Department and are analyzing any potential impact

it might have on us and the auto industry in the U.S."