US Senate panel advances bill that could ban Mercedes sales over Chinese ownership ties

The bill's provisions

The Connected Vehicle Safety Act (S. 4429), approved by the Senate Commerce Committee on 22 July, would prohibit the import, production, sale and resale of connected vehicles from any manufacturer in which a Chinese, Russian, Iranian or North Korean entity holds at least 15% of shares. The ban would take effect from 2027 for software and later for hardware, with longer transition periods for components. The bill also targets vehicles that use security-relevant software originating from those countries.

Mercedes in the crosshairs

Mercedes-Benz is the only major German automaker with Chinese shareholders large enough to potentially trigger the threshold. State-owned BAIC holds 9.98% and Geely founder Li Shufu holds 9.69%, together exceeding 15%. It remains unclear whether the bill would aggregate the two stakes. Volkswagen and BMW have no comparable direct Chinese blockholders, but they would still need to ensure their US-bound vehicles contain no banned Chinese software or hardware.

Senate debate and pushback

During the committee session, Senator Ted Cruz argued the 15% limit appeared designed to hurt Mercedes, a rival of General Motors. He called for the threshold to be removed entirely.

GM is pushing for this provision with the aim of eliminating Mercedes-Benz from the market.

Both Cruz and co-sponsor Bernie Moreno insisted they do not want a ban on Mercedes sales. Moreno noted the bill gives manufacturers the option to apply for exemptions from the Commerce Department.

Mercedes' US footprint

Mercedes responded by emphasising its deep American roots. The company said it supports around 160,000 US jobs, operates factories in Tuscaloosa, Alabama and Charleston, South Carolina, and works with 386 dealers across 49 states. It also stressed that no single shareholder exceeds 10%, and that the major shareholders are not represented on the supervisory board and have no control over business decisions.

The brand's strong presence in the United States dates back to 1888. Today, five million Mercedes-Benz passenger cars and vans are on American roads, and more than five million SUVs and nearly 500,000 vans have been assembled in the country.

What happens next

The bill must now pass the full Senate, then go through committee hearings and a floor vote in the House of Representatives. Only after both chambers approve it can the legislation be sent to the president for signature. The timeline remains uncertain, and the debate over the 15% threshold suggests amendments are likely before any final vote.