Proposed U.S. Bill Could Hit Mercedes Sales Over Chinese Ownership Limits

The U.S. Senate Committee on Commerce, Science, and Transportation recently passed the "Connected Vehicle Safety Act of 2026" unanimously. The bill seeks to ban connected vehicles, in-vehicle software, and communication equipment linked to so-called "countries of concern"—including China, Russia, Iran, and North Korea—from entering the U.S. market. It establishes a "15% ownership threshold rule," stipulating that if a Chinese entity or individual holds 15% or more equity or voting rights in an automaker, that company would be designated a "high-risk foreign entity," potentially subjecting its connected vehicles produced or sold in the United States to restrictions. Mercedes-Benz’s two Chinese shareholders—BAIC Group and an investment vehicle controlled by Li Shufu—collectively hold 19.67% of the company, exceeding this threshold. Although Mercedes-Benz emphasizes that each Chinese shareholder individually holds less than 10% and does not participate in corporate management decisions—and notes that it indirectly supports approximately 160,000 U.S. jobs—the current version of the bill could still bring its U.S.-produced connected vehicles under regulatory scrutiny. The bill must still undergo further legislative steps before becoming law. Industry observers widely believe it is unlikely that Mercedes-Benz sales in the U.S. would be immediately halted in the near term. Senate Commerce Committee Chair Ted Cruz acknowledged that the current provisions could affect Mercedes-Benz and indicated that revisions are highly probable during the final deliberation stage. Mercedes-Benz may also respond by adjusting its equity structure or applying for exemptions before 2030. If enacted, the legislation would also impact other automakers with Chinese investment, such as Volvo and Lotus, and their strategic plans in the U.S. market.