US Legislation Threatens Mercedes-Benz Sales Over Chinese Ownership

German automaker Mercedes-Benz may become the unlikely casualty of an upcoming US legislation. This comes after the US Senate Commerce Committee approved a legislation to toughen a government ban on Chinese automakers entering the American market. This restriction on Chinese companies could also bar Mercedes-Benz from selling its vehicles in the United States of America. As per the bill's provisions, it seeks to ban companies with more than 15% ownership by Chinese entities, which means that it would also bar Mercedes-Benz because of its nearly 20% passive Chinese investment. Called Connected Vehicle Security Act of 2026, the bill passed unanimously, setting it up for consideration by the full Senate. The bill has been proposed by Senator Moreno. Praising the passage of his bipartisan bill, Moreno said, "Connected Vehicle Security Act protects American automakers and workers from the dire threat of Chinese automobiles by banning them and their connected components on American soil. This bill prohibits the import, sale, and operation of vehicles manufactured in China, or any other country of concern, and bans the use of Chinese-developed connected vehicle technologies, such as software and data systems, on America roads." Moreno, an Ohio Republican, said that Mercedes-Benz would have until 2030 to comply and could get waivers if needed from the ownership requirement if necessary. Incidentally, Bluetooth, Wi-Fi, cellular connectivity and some satellite communications technologies too are covered under the rules based on national security concerns linked to the ability of vehicles to collect sensitive data on American owners. Senators Moreno and Elissa Slotkin, a Democrat, proposed the legislation to codify a regulation imposed by the Biden administration that effectively bans all Chinese automakers from selling passenger vehicles in the US and takes other steps to prevent China from entering the US light-duty market. "We're preventing an absolute, total, and complete destruction of our industrial base," Moreno said as per the report. Senator Ted Cruz, the chair of the committee, claimed that General Motors was pushing for the provision to get Mercedes-Benz out of the market and make its Cadillac brand more competitive. He said "we would never consider" banning Mercedes-Benz sales in the United States. Responding to Cruz's claim GM said that the legislation isn't about any individual automaker and added the automaker "supports policies that protect and strengthen American manufacturing and the global competitiveness of US automakers." Moreno added that GM plans to shift production of its Chinese-made Buick Envision to the United States for the 2028 model year and said Ford has agreed to move Chinese-made Lincolns to the United States. "I view that as a big victory," Moreno said. He further told Reuters that Google's self-driving unit Waymo, which had been talking with Chinese automaker Geely about platforms coming from China, "has committed to looking at a Detroit-based manufacturer for their future platforms."

What Mercedes-Benz said on the bill

Responding to the bill, Mercedes-Benz pointed to its extensive operations in the US. The company further said that it "continues to support legislation designed to protect US national security. Mercedes-Benz also remains committed to ensuring that any legislation does not impact our operations. The company will continue to safeguard its employees, dealers, suppliers, and customers."

Bill to hit some European car makers too

Mercedes-Benz is not the only automaker to be hit by the upcoming legislation. Last month, electric-vehicle maker Polestar claimed that the Trump administration was forcing the company to stop selling vehicles in the US beginning in the 2027 model year. The Sweden-based company is majority-owned by China's Geely Holding. Polestar's sister brand and co-founder, Volvo Cars, said in May that it received authorization to keep selling vehicles in the US, though it said it still must meet the rule's requirements.