For years, China has been testing its self-driving car technology in the U.S.

Autonomous vehicles are being actively developed by Chinese companies. In August, China revealed that it had granted 16,000 test licenses for driverless cars and made available 20,000 miles of roads for autonomous vehicle testing.

U.S. streets have also been secretly used by Chinese autonomous vehicle companies to test their technology.

The five companies, Baidu, Didi, WeRide, Pony.ai, and AutoX, all have offices in northern California, where many U.S. autonomous car outfits are located. These five companies logged over 1.6 million test miles on California's roads between 2017 and 2023, according to data from the California Department of Motor Vehicles. However, out of these five companies, only Didi no longer has an active AV testing permit, as per the DMV's website.

Michael Dunne, CEO and founder of consulting firm Dunne Insights, stated on CNBC that China has complete freedom to test AVs in California.

"Dunne stated that Silicon Valley was the birthplace of autonomous vehicle technology and emphasized the importance of hiring top talent from companies such as Apple, Tesla, Waymo, and Cruise. He added, "We have the funding and the goal of building a world-class company. Bring that knowledge back to China, apply it to our vast home market, and we'll be successful.""

The U.S. government has proposed a ban on Chinese connected vehicles due to concerns about the massive amount of data being collected and its potential implications for national security.

A former senior safety advisor to the National Highway Traffic Safety Administration, Missy Cummings, stated that the ban was a positive first step.

"Cummings stated that these vehicles are essentially surveillance machines with numerous cameras capturing everything from various angles, repeating the same pattern daily under the guise of testing."

Cummings stated that the vehicles collect "sensitive information about patterns of life, vehicles entering and exiting specific installations, and supply chain operations."

Representative Marc Veasey of Texas expressed his concerns about Chinese autonomous vehicles operating in the U.S. posing threats to national security and competitiveness, along with three other representatives, in a letter to the Biden administration last year.

Chinese autonomous vehicle companies are reducing their presence in the U.S. due to heightened scrutiny.

Dunne stated to CNBC that over 14 Chinese companies were testing their vehicles in California, Nevada, and Utah during the peak of Chinese AV testing. However, today, Dunne revealed that there is "little evidence or intention among Chinese autonomous vehicle makers to launch products in the United States."

"He stated, "We had a successful run in the United States and gained valuable knowledge. Moving forward, we may have the resources to develop our own innovations within China.""

The increased scrutiny around Chinese connected vehicles could have a significant impact on the AV industry in California, as companies are currently testing their vehicles on the state's roads.