US Senate Committee Approves Bill That Could Restrict Mercedes-Benz Sales

U.S. Senate Committee on Commerce, Science and Transportation Legislation

Senate Committee Action and the 15 Percent Threshold

Eric Li Shufu and BAIC Group Ownership

The U.S. Senate Committee on Commerce, Science and Transportation voted unanimously on Wednesday to advance the Connected Vehicle Security Act to the full Senate floor. The legislation targets automakers with more than a 15 percent ownership stake held by Chinese entities, a move that directly impacts the German manufacturer Mercedes-Benz. According to reports from MSN and Bild, the company currently faces nearly 20 percent total ownership by Chinese groups, raising questions about its future eligibility to sell vehicles in the United States.

The ownership structure involves two primary investors. Eric Li Shufu, the founder and chairman of Geely, owns 9.7 percent of Mercedes through an investment firm, while the BAIC Group (Beijing Automotive Group) owns an additional 9.98 percent. Mercedes-Benz has maintained that it does not fall under the proposed restrictions, arguing that no single individual Chinese shareholder exceeds a 10 percent threshold.

Legislative Intent and Potential Waivers

Department of Commerce Waivers and Alabama and South Carolina Facilities

Despite the committee’s vote, significant uncertainty surrounds the bill’s implementation. Senator Ted Cruz (R-TX), who serves as the committee chair, noted that the proposal requires adjustments before it can become law. Addressing concerns regarding the German automaker, Cruz explicitly stated that the committee is not seeking an outright prohibition.

Ted Cruz, Senator (R-TX), stated via MSN that the committee would never consider banning Mercedes-Benz sales in the United States.

Senator Bernie Moreno (R-OH) added that should the legislation pass as currently written, manufacturers would have until 2030 to reach compliance. Furthermore, the bill includes provisions for the Department of Commerce to grant waivers, which could allow companies to skirt the regulation if they meet specific criteria. This regulatory pathway serves as a potential safety net for established brands like Mercedes, which contributes significantly to the U.S. economy. According to official company statements, the manufacturer’s operations support approximately 160,000 jobs in the United States, including major production facilities located in the states of Alabama and South Carolina.

Broader Industry Context and Regulatory Shifts

General Motors and the Cadillac Brand

The scrutiny of Chinese-linked automotive interests is part of a wider trend in U.S. trade policy. Less than a month ago, the U.S. Department of Commerce’s Bureau of Industry and Security informed Polestar—the Swedish automaker also owned by Geely—that it would be prohibited from selling vehicles in the United States starting in 2027. In contrast, Volvo, which is also owned by Geely, stated in May that it had received authorization to continue its U.S. sales, provided the company meets specific regulatory requirements.

Some lawmakers have suggested that domestic competition is a factor in the current legislative push. According to reports cited by MSN, Senator Cruz indicated that General Motors has pushed for the legislation as a potential mechanism to remove Mercedes-Benz from the competitive landscape, thereby increasing the market position of the Cadillac brand. As the bill moves toward a full Senate floor vote, the focus remains on whether the final language will balance national security concerns with the economic realities of globalized automotive supply chains. Beyond the primary focus on Mercedes, other German manufacturers, including Volkswagen and BMW, could also face potential regulation due to their existing partnerships with Chinese suppliers.

Sources: Korrespondent.