Mercedes Just Moved a Step Closer to Being Banned in America

Mercedes-Benz has moved a critical step closer to a potential U.S. sales problem Wednesday after the Senate Commerce Committee advanced bipartisan legislation aimed at tightening restrictions on Chinese automakers and Chinese-linked vehicle technology.

News of this ban first arose in early June when the bipartisan bill hit Congress.

The issue is the bill’s ownership threshold. The Motor Vehicle Modernization Act of 2026 would set a 15% Chinese ownership limit, and Senate Commerce Committee Chairman Ted Cruz, R-Texas, warned during the markup that the language would cover Mercedes-Benz because two Chinese investors collectively own nearly 20% of the company’s shares.

That was the red flag. A major one.

“We would never consider” banning Mercedes-Benz, Cruz said, according to CNBC, adding that the legislation would need to be changed before it could become law.

Mercedes-Benz’s two largest individual shareholders are both Chinese. BAIC, formerly Beijing Automotive Industrial Corp., holds a 9.98% stake, while Geely founder Li Shufu owns 9.69%. Together, those holdings put Mercedes above the bill’s proposed threshold, even though Cruz said the committee did not intend to remove the German automaker from the U.S. market.

The legislation is aimed at codifying federal restrictions meant to keep Chinese-linked vehicle technology out of the U.S. over national security concerns tied to connected cars potentially collecting sensitive data. Sen. Bernie Moreno, R-Ohio, introduced the bill with Sen. Elissa Slotkin, D-Mich., and framed it during the markup as an industrial-base measure.

Mercedes has substantial U.S. operations that would be directly relevant if the provision survived unchanged. The company previously declined to comment on the legislation, but said it employs more than 10,000 people in the U.S. and operates assembly plants in Alabama and South Carolina. In fact, just this week Mercedes revealed a new flagship Mercedes-Maybach GLS 680 model which is made at the brand's Tuscaloosa, Alabama plant.

There is time built into the proposal. Mercedes-Benz would have until 2030 to comply with the ownership limit and could seek a waiver. That leaves multiple paths short of an outright ban, including a revised threshold, a carveout, a waiver process, or changes in ownership structure before the compliance deadline.

The bill still has to clear additional steps before becoming law, and Cruz’s comments indicate the current language is already under scrutiny inside the committee that advanced it. Still, the vote matters because it moves the measure out of committee with the Mercedes issue unresolved.