The proposed law targets any automaker that has a Chinese entity owning more than 15% of the company. That sounds like a small detail, but it has huge consequences for Mercedes-Benz.
Why does ownership matter? The bill's sponsors worry that Chinese-linked vehicles could collect data on American drivers and send it back to Beijing. Senator Elissa Slotkin put it bluntly: "Chinese cars are surveillance packages on wheels."
But the ownership rule catches more than just Chinese-owned companies. It also catches companies like Mercedes that have Chinese investors whose stakes are passive.
If the combined Chinese ownership crosses 15%, the automaker cannot sell connected vehicles here. This would effectively stop Mercedes from selling almost any new model in the U.S.
Mercedes is not the only one stuck in the crosshairs. Under a Trump administration directive, Polestar - a Swedish electric vehicle maker - was prohibited from marketing new connected cars in America beginning with the 2027 model year. The reason? It is majority-owned by Geely, a Chinese automaker.
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Geely had been in talks with Waymo - the self-driving company owned by Google - about platforms coming from China. Senator Bernie Moreno stated that Waymo is committed to evaluating a manufacturer based in Detroit for its upcoming platforms. Volvo Cars, Polestar's sibling brand and co-founder, announced in May that it received permission to keep selling vehicles in the United States.
General Motors and Ford have also made moves. Ford reached an agreement to move its Chinese-manufactured Lincoln vehicles to America. General Motors plans to relocate the manufacturing of its Buick Envision, currently built in China, to the United States by the 2028 model year. Senator Moreno called that "a big victory."
This is where the story gets messy. Senator Ted Cruz, the Republican chair of the Senate Commerce Committee, warned that the bill would shut Mercedes out of the U.S. market unless changes are made. He said flatly that he would "never consider" banning Mercedes sales in the country.
Cruz further charged that General Motors was driving the legislation to exclude Mercedes-Benz from the market and enhance Cadillac's competitiveness. He cited a separate clause supported by GM that would force automakers to buy pricier batteries from the company, raising a vehicle's price by $5,000. GM refuted the claim that the bill was designed to single out any particular automaker, stating that it "supports policies that protect and strengthen American manufacturing and the global competitiveness of U.S. automakers."
Mercedes-Benz pointed to its significant footprint in the United States, while emphasizing that it "continues to support legislation designed to protect U.S. national security." The automaker also said it remains "committed to ensuring that any legislation does not impact our operations. The company will continue to safeguard its employees, dealers, suppliers and customers."
The legislation provides a mechanism by which automakers can request Commerce Department approval for cars that would otherwise be banned.
The bottom line: The bill may change before it becomes law. Nothing is final yet.
The Polestar ban already showed how fast things can change.
For now, the industry is watching the Senate floor. Your next car purchase might depend on which way this bill goes.
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