Bipartisan legislation aimed at tightening restrictions on Chinese automakers in the U.S. market has advanced through the Senate Commerce Committee. Concerns arose from Chairman Ted Cruz (R-Texas) that the proposed bill might inadvertently prevent Mercedes-Benz from operating in the country due to its ownership structure. The Motor Vehicle Modernization Act of 2026 sets a 15% Chinese ownership threshold, which potentially affects Mercedes-Benz as it is significantly owned by two Chinese investors: state-owned BAIC, holding a 9.98% stake, and Geely founder Li Shufu, with 9.69%.
During the committee’s discussions, Cruz emphasized that barring Mercedes-Benz was not the bill’s intention and highlighted the need for amendments before the legislation can be enacted. The bill seeks to formalize existing federal restrictions designed to safeguard national security against potential risks associated with Chinese technology in vehicles.
Senator Bernie Moreno (R-Ohio), who co-sponsored the bill with Senator Elissa Slotkin (D-Mich.), reiterated that the legislation aims to protect the U.S. industrial base. Mercedes-Benz, which employs over 10,000 people in the U.S. and runs assembly plants in Alabama and South Carolina, has not publicly commented on the matter but was given until 2030 to meet the ownership threshold, with options to seek waivers.
Cruz also accused General Motors of advocating for the ownership limit to diminish Mercedes-Benz’s competitive edge, thus benefiting its Cadillac brand. As of now, neither General Motors nor Mercedes-Benz has responded to these claims.
Why this story matters
- National security concerns are driving legislative changes affecting foreign automotive investments in the U.S.
Key takeaway
- The bill aims to restrict Chinese ownership in the U.S. auto market while raising concerns about its implications for companies like Mercedes-Benz.
Opposing viewpoint
- Critics argue that the bill could harm competitive dynamics in the auto industry, particularly affecting established brands like Mercedes-Benz.
