AUTONEWS

Why US targets automakers with over 15% Chinese ownership?
Mercedes-Benz builds sport utility vehicles in Alabama for markets around the world and runs a van plant in South Carolina. Chinese groups, including Geely and Beijing Automotive, together own nearly 20 percent of the German company. That combination of US factories and Chinese shareholders turned a bill aimed at Chinese automakers into a direct threat to Mercedes’s American business.
The Senate Commerce Committee’s proposal would bar any automaker with more than 15 percent Chinese ownership from selling vehicles in the United States. With its stake sitting just under 20 percent, Mercedes landed squarely in the bill’s path and quickly became the most prominent test case.
The legislation was written to keep Chinese automakers and their technology off American roads, not to punish a German company with about three decades of US manufacturing history. But the ownership math did not discriminate.
Once the 15 percent threshold became public, it was obvious Mercedes sat on the wrong side of it.
Senator Bernie Moreno, the bill's lead sponsor, acknowledged the problem directly. Moreno told Reuters that lawmakers were negotiating changes specifically so the bill would not ban Mercedes-Benz from the US market.
Mercedes-Benz CEO Ola Källenius has pushed back on the idea that Chinese ownership gives Beijing any real influence over the company. "They are by no means acting in consort, nor are they representative on the board," Källenius said, describing the stakes as financial and passive rather than coordinated.
Senator Ted Cruz offered a different read on the standoff. He claimed General Motors was lobbying for the ownership threshold to push a rival out of the American market. That accusation has not been independently verified. It shows how fractured the politics around this bill have become.
Mercedes is lobbying to raise the ownership cap from 15 percent to 25 percent, which would clear the company without forcing any restructuring of its shareholder base. Moreno has floated a separate option: waivers that would let Mercedes keep operating while regulators sort out compliance details.
Not every senator is on board with carving out exceptions. Rand Paul argued the 15 percent line could sweep in Mercedes-Benz alongside smaller brands like Aston Martin and Lotus, and he wants the bill's scope narrowed before it goes further. That disagreement helped stall the vote.
Senate sponsors have now pushed the permanent vote to November, after the chamber returns from recess, rather than force a decision before the midterm elections. If the bill eventually passes in its current form, Mercedes would have until 2030 to bring its ownership structure into compliance.
The fight over this bill sits inside a broader federal push on Chinese-connected vehicle technology, which has already shaped how automakers handle software and data from vehicles built with Chinese components. Other automaker executives have raised similar concerns about where the line between ownership and technology risk actually falls. That distinction is exactly what is keeping this bill in limbo through November.
The U.S. Senate Commerce Committee approved legislation on Wednesday to toughen a government ban on Chinese automakers entering the American market that could bar German automaker Mercedes-Benz from selling vehicles in the United States.
Senator Ted Cruz, the committee chair and a Texas Republican, said the bill's provision that would ban companies with more than 15% ownership by Chinese entities would bar Mercedes-Benz (MBGn.DE), opens new tab from selling vehicles in the United States because of its nearly 20% passive Chinese investment. He said the bill required changes before it could become law.
Senator Bernie Moreno, an Ohio Republican, said Mercedes-Benz would have until 2030 to comply and could get waivers if needed from the ownership requirement if necessary.
Moreno and Senator Elissa Slotkin, a Michigan Democrat, proposed legislation to codify a regulation imposed by the Biden administration that effectively bans all Chinese automakers from selling passenger vehicles in the U.S. and takes other steps to prevent China from entering the U.S. light-duty market.
"We're preventing an absolute, total, and complete destruction of our industrial base," Moreno said.
Cruz said General Motors was pushing for the provision to get Mercedes-Benz out of the market and make its Cadillac brand more competitive. He said "we would never consider" banning Mercedes-Benz sales in the United States.
GM said in response the legislation isn't about any individual automaker and added the automaker "supports policies that protect and strengthen American manufacturing and the global competitiveness of U.S. automakers."
Mercedes-Benz noted its extensive U.S. operations and said it "continues to support legislation designed to protect U.S. national security. Mercedes-Benz also remains committed to ensuring that any legislation does not impact our operations. The company will continue to safeguard its employees, dealers, suppliers, and customers.
Moreno noted that GM plans to shift production of its Chinese-made Buick Envision to the United States for the 2028 model year and said Ford has agreed to move Chinese-made Lincolns to the United States.
"I view that as a big victory," Moreno said.
He added Google's self-driving unit Waymo, which had been talking with Chinese automaker Geely about platforms coming from China, "has committed to looking at a Detroit-based manufacturer for their future platforms."
Cruz said another bill provision supported by GM to require automakers buy more expensive batteries from GM would add $5,000 to the vehicles' cost. An amendment to revise the battery management software requirements failed.
Moreno said that amendment had been sought by Rivian, opens new tab, which did not immediately comment.
Last month, Polestar, opens new tab said the Trump administration was forcing the electric-vehicle maker to stop selling vehicles in the U.S beginning in the 2027 model year. The Sweden-based company is majority-owned by China's Geely Holding.
Polestar's sister brand and co-founder, Volvo Cars, said in May it received authorization to keep selling vehicles in the U.S., though it said it still must meet the rule's requirements.
Bluetooth, Wi-Fi, cellular connectivity and some satellite communications technologies are covered under the rules based on national security concerns linked to the ability of vehicles to collect sensitive data on American owners.
Mercedes escapes...The US government has decided to draft legislation banning not only Chinese manufacturers from the market but also automakers in which Chinese entities hold a stake exceeding 15%. Interestingly, this strategy has put pressure not just on Chinese brands—whether state-owned or private—but also on European automakers in which Chinese companies hold significant stakes. And there are many such cases.
The driving force behind the bill—which aims to ban automakers with excessively high Chinese ownership from the US market—is Senator Bernie Moreno. A 59-year-old Republican born in Colombia, he is leading the discussion on the issue. The goal of the proposed regulation, known as the "Connected Vehicle Security Act" (which has not yet been passed), is to protect the US from vehicles capable of spying—much like the actions China itself took against vehicles within its own borders quite recently.
Despite the ongoing debate, there is little doubt that US regulators will push for the legislation to move forward, even though it places some of the automakers most popular with Americans in a very difficult position. This is the case for Mercedes-Benz, which has two Chinese shareholders: one is the state-owned Beijing Automotive Group (BAIC Group), and the other is the private consortium Geely, represented by Li Shufu.
While BAIC holds a 9.98% stake in Mercedes, Geely (through Shufu) controls 9.7%; combined, this brings the total Chinese stake in the "Silver Star" brand to 19.68%—well above the 15% limit proposed by the US legislation. As soon as the proposed legislation was announced, attention was quickly drawn to the fact that certain “non-Chinese” manufacturers also risked being shut out of the US market.
Moreno all but guaranteed that President Trump would not sign a law banning Mercedes; however, lawmakers are also looking for a way to accommodate other manufacturers that are similarly non-compliant with the regulations—such as Aston Martin, which currently has 17% of its capital held by Chinese interests. Then there is Volvo: despite being 100% owned by Geely, it will still be able to compete in the North American market, where it even operates manufacturing plants. It is worth noting that Polestar—which, like Volvo, is owned by Geely—has already been informed that it will be barred from selling in the US.
A U.S. Senate bill titled the Connected Vehicle Security Act proposes barring vehicle sales from any automaker with more than 15% Chinese ownership.
Key details of the legislation:
• Core rule: The bipartisan bill bans connected vehicles containing Bluetooth, Wi-Fi, cellular, or satellite communication tech from companies with over 15% Chinese equity.
• Reason: National security concerns regarding data collection on American drivers and software vulnerability.
• Timeline: Automakers would have until 2030 to comply or seek official waivers.
• Sponsors: Led by Senator Bernie Moreno (R-OH) and Senator Elissa Slotkin (D-MI).
Impacted automakers:
• Mercedes-Benz: Faces the largest spotlight because Chinese investors hold nearly 20% passive ownership combined (split between Beijing Automotive/BAIC and Geely's Li Shufu). Sponsors have signaled that Mercedes-Benz is not intended to be banned and are working on carve-outs or adjusting the threshold.
• Polestar: Faces a U.S. sales halt starting in the 2027 model year due to its majority ownership by China's Geely Holding.
• Other Brands with Chinese Ties: Volvo Cars (majority Geely-owned), Aston Martin (17% Geely-owned), and Lotus (majority Geely-owned) are also under review as lawmakers negotiate adjustments