New Senate Legislation Could Bar Mercedes-Benz from U.S. Market Over Chinese Ownership Ties

Mercedes-Benz faces a potential ban on the sale of its connected vehicles in the United States following new legislation targeting automakers with significant Chinese ownership. Last week, the Senate Commerce Committee advanced a measure that would prohibit the sale of connected vehicles by companies where Chinese entities hold more than a 15% stake. This move could specifically impact German manufacturer Mercedes-Benz, as two Chinese investors currently hold combined stakes totaling nearly 20%.

The bipartisan legislation, sponsored by Senators Elissa Slotkin (D-Mich.) and Bernie Moreno (R-Ohio), seeks to expand upon restrictions established by the Biden administration. Proponents argue the bill is necessary to prevent Chinese-origin software and components from being used to collect data on American citizens and funneling it to the Chinese government.

“Chinese cars act as surveillance packages on wheels, capable of collecting data on American citizens and transmitting it back to Beijing,” Slotkin stated.

Mercedes-Benz faces a potential ban on selling connected vehicles in the U.S. under legislation targeting automakers with significant ownership ties to China. (Eric Thayer/Bloomberg via Getty Images / Getty Images)

Senator Moreno emphasized that the measure aims to prevent the destruction of the American industrial base, suggesting that China’s automotive industry is designed to undermine U.S. manufacturing and national security. However, Senate Commerce Committee Chair Ted Cruz (R-Texas) cautioned that without significant revisions, the law could effectively shut Mercedes-Benz out of the U.S. market.

Cruz suggested the legislation might be influenced by competitors, alleging that General Motors is pushing for these measures to disadvantage Mercedes-Benz and bolster its Cadillac brand. “We would never consider” banning Mercedes-Benz sales in the U.S., Cruz stated.

General Motors responded to these claims, stating the legislation is intended to support policies that strengthen American manufacturing and global competitiveness rather than targeting a specific company. GM added, “As we have said many times, we can compete with anyone in the world when we are given a level playing field.”

The Senate Commerce Committee advanced a measure last week that would bar the sale of vehicles in the U.S. by companies with more than 15% ownership by Chinese entities. (ANDREW CABALLERO-REYNOLDS/AFP via Getty Images / Getty Images)

Mercedes-Benz has highlighted its extensive U.S. operations and stated it supports legislation aimed at protecting national security, while emphasizing its commitment to ensuring such laws do not disrupt its operations or impact its employees, dealers, and customers.

The proposed bill includes a provision allowing manufacturers to seek authorization from the Commerce Department for vehicles that would otherwise be prohibited. Senator Moreno noted that both GM and Ford are working to move production of certain Chinese-made models to the U.S. to mitigate these risks.

Sen. Ted Cruz warned that Mercedes-Benz would be removed from the U.S. market if the legislation becomes law. (Artur Widak/NurPhoto via Getty Images / Getty Images)

Cruz also noted that Waymo, Google’s self-driving vehicle company, has committed to exploring Detroit-based manufacturers for future platforms following previous talks regarding Chinese platforms. Additionally, Cruz raised concerns about another provision that could increase vehicle costs by requiring the use of more expensive batteries.

This legislative movement follows recent actions by the Trump administration, which banned Polestar from selling new connected vehicles in the U.S. starting in the 2027 model year due to its majority ownership by Geely. Meanwhile, Volvo Cars, Polestar’s sister brand, was permitted to continue U.S. sales earlier this year.

The bill must pass both the Senate and the House and receive the president’s signature to become law.

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