US Senate Bill Could Ban Mercedes-Benz Over Chinese Shareholding

A bill progressing through the U.S. Senate could potentially prohibit Mercedes-Benz from selling its vehicles in the United States. The Senate Committee on Commerce, Science, and Transportation has advanced the 'Connected Vehicle Security Act,' which includes provisions that could impact automakers with significant Chinese investment.

The proposed legislation sets a threshold of 15% Chinese ownership for companies seeking to sell connected vehicles in the U.S. Mercedes-Benz, the German luxury automaker, currently faces scrutiny as Chinese entities hold nearly 10% of its shares. This, combined with additional shares held by Geely founder Li Shufu, could push its Chinese shareholding above the 15% limit stipulated in the bill.

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This 15% threshold is a political maneuver aimed at benefiting the Cadillac brand by impacting a competitor.

During the committee's review, a significant point of contention was this 15% ownership cap. Senator Ted Cruz, the committee chairman, criticized the provision, suggesting it was a politically motivated move designed to benefit competitors like General Motors' Cadillac brand. He argued that the threshold should be based on a qualitative national security risk assessment, similar to the model used by the Committee on Foreign Investment in the United States (CFIUS).

Senator Bernie Moreno, a co-sponsor of the bill, countered that the provision is not specifically targeting Mercedes-Benz. He noted that the German automaker would have until 2030 to comply with the requirements, and exemptions could be sought from the Department of Commerce. Moreno emphasized that there is no intention to ban Mercedes-Benz sales outright, but rather to ensure compliance with security standards for connected vehicles.

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We are absolutely not going to do, nor does anyone have the intention of doing, is ban the sale of Mercedes-Benz in the United States.