American legislators aim to protect the domestic auto market from an influx of inexpensive Chinese electric vehicles that are cutting into European automakers' sales at home, endangering employment and business earnings. In April, Michigan Democrat Elissa Slotkin and Ohio Republican Bernie Moreno introduced a bipartisan Senate bill that would ban the sale of internet-connected cars from any automaker with Chinese ownership exceeding 15%.
The bipartisan nature of the bill underscores the growing consensus in Congress that Chinese ownership of automakers could compromise national security, particularly as vehicles become increasingly connected and capable of collecting sensitive data. Lawmakers on both sides have expressed concerns about potential data transmission to Beijing.
About one-tenth of Mercedes shares belong to BAIC Motor Corp., a Chinese state-owned manufacturer. Li Shu Fu, the billionaire who founded and chairs Chinese automaker Geely, also owns about 10% of Mercedes stock, bringing total Chinese ownership above the 15% mark.
Under the Senate bill, automakers not yet active in the U.S. would face an immediate ban, while those like Mercedes already operating would have until 2030 to comply. This timeline provides Mercedes about three years to adjust its ownership structure.
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Additionally, legislators are considering replacing the fixed percentage with a qualitative assessment that examines national security implications.
Mercedes did not directly comment on the bill. The company said in a statement: "Mercedes-Benz continues to support legislation designed to protect US national security. Mercedes-Benz also remains committed to ensuring that any legislation does not impact our operations."
On July 16, the House Select Committee on China criticized Mercedes in a social media post, alleging the company is actively lobbying against the legislation. The Republican-led committee issued that statement on X, saying: "All Americans should be watching as this German-based, Chinese-owned company tries to tell US lawmakers how to set the rules for our own country."
Lawmakers on the Senate panel that oversees commerce and transportation intend to review the bill this week, after a hearing set for last week was delayed.
Volvo Car AB would also fall under the proposed ownership limit. But the legislation contains a grandfather clause that would protect Volvo by honoring an existing agreement with the U.S. government allowing it to keep operating.
Mercedes-Benz has a significant footprint in the United States, with assembly plants in Alabama and South Carolina that employ thousands of American workers. The company has invested billions in domestic manufacturing, including a recent $4 billion commitment through 2030, underscoring its long-term commitment to the U.S. market. This makes any potential disruption due to the proposed ownership limit a serious concern for the automaker and its American workforce.
Discussions on the bill are still evolving, and although it is gathering support, it is not guaranteed to pass, according to sources.
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