Senate panel advances China auto bill with Mercedes-Benz concerns
The measure targets Chinese-linked vehicles and technology, but senators flagged a provision that could affect Mercedes-Benz because of Chinese shareholders.
By Maya Lindqvist · Senior Technology Correspondent
2 min read
The Senate Commerce Committee advanced bipartisan legislation Wednesday that would tighten U.S. limits on Chinese-linked automakers and vehicle technology. CNBC reported that the debate turned quickly to whether the bill’s ownership test could sweep in Mercedes-Benz, one of the world’s best-known luxury auto brands.
The Motor Vehicle Modernization Act of 2026 is aimed at keeping Chinese-connected vehicle systems out of the U.S. market over national security concerns tied to data collection by connected cars, according to CNBC. The bill would write federal restrictions into law and set a 15% threshold for Chinese ownership.
Sen. Ted Cruz, R-Texas, who chairs the committee, warned during the markup that the threshold could apply to Mercedes-Benz. Cruz said two Chinese investors together own nearly 20% of the company’s shares, according to CNBC.
Cruz said lawmakers “would never consider” banning Mercedes-Benz and said the measure would need changes before it could become law, CNBC reported. His objection centered on the risk that language aimed at Chinese automakers could affect a German company with significant Chinese shareholders.
Mercedes-Benz lists Chinese state-owned automaker BAIC, formerly Beijing Automotive Industrial Corp., as one of its two largest individual shareholders, with a 9.98% stake, according to the company’s shareholder information cited by CNBC. The other is Geely founder Li Shufu, who holds 9.69%.
Sen. Bernie Moreno, R-Ohio, introduced the legislation with Sen. Elissa Slotkin, D-Mich., according to CNBC. Moreno said during the markup that the bill is intended to protect the U.S. auto sector, saying, “We’re preventing an absolute, total, and complete destruction of our industrial base.”
Moreno also said Mercedes-Benz would have until 2030 to meet the ownership requirement and could request a waiver, CNBC reported. Mercedes-Benz previously declined to comment on the legislation, but said it employs more than 10,000 people in the United States and runs assembly plants in Alabama and South Carolina, according to CNBC.
The committee debate also drew in General Motors. Cruz accused GM of backing the provision to hurt Mercedes-Benz and help Cadillac compete, saying, “GM is pushing for this provision to get Mercedes-Benz out of the market,” CNBC reported.
CNBC reported that GM and Mercedes-Benz did not immediately respond to requests for comment. CNBC also reported that GM is the top-selling automaker in the United States.
The bill’s advance moves the proposal one step further in Congress, though Cruz’s comments signal that negotiations over the ownership threshold are likely before any final passage. As reported by CNBC, the dispute shows how broad restrictions on Chinese-linked vehicle technology can create complications for global automakers with cross-border investors.
This story draws on original reporting from CNBC.