Senate passes China auto bill that could bar Mercedes-Benz from U.S.

The Senate Commerce Committee advanced bipartisan legislation Wednesday aimed at toughening a ban on Chinese automakers from the U.S. market, even as Chairman Ted Cruz, R-Texas, warned that it could unintentionally bar Mercedes-Benz from selling vehicles in the country.

Cruz said during the committee’s markup of the Motor Vehicle Modernization Act of 2026 that the bill’s 15% Chinese ownership threshold would cover Mercedes-Benz because two Chinese investors collectively own nearly 20% of its shares.

“We would never consider” banning Mercedes-Benz, Cruz said, adding that the bill would need to be changed before becoming law.

Mercedes-Benz’s two largest individual shareholders are Chinese state-owned automaker BAIC, formerly the Beijing Automotive Industrial Corp., with a 9.98% stake, and Geely founder Li Shufu, with 9.69%.

The bill would codify federal restrictions intended to keep Chinese-linked vehicle technology out of the U.S. over national security concerns that connected cars could collect sensitive data.

“We’re preventing an absolute, total, and complete destruction of our industrial base,” said Sen. Bernie Moreno, R-Ohio, who introduced the bill with Sen. Elissa Slotkin, D-Mich.

Mercedes-Benz previously declined to comment on the legislation but said it employs more than 10,000 people in the U.S. and operates assembly plants in Alabama and South Carolina.

Moreno said during the markup that Mercedes-Benz would have until 2030 to comply with the ownership limit and could seek a waiver.

During the markup, Cruz also accused General Motors of supporting the provision in an effort to weaken Mercedes-Benz and make Cadillac more competitive.

“GM is pushing for this provision to get Mercedes-Benz out of the market,” Cruz said.

GM and Mercedes-Benz did not immediately respond to requests for comment. GM is the top-selling automaker in the U.S.