U.S. Bill Threatens Mercedes-Benz Sales Over Chinese Ownership Stakes

A provision in the House-passed Motor Vehicle Modernization Act of 2026 would bar any automaker with 15 % or more ownership by a “foreign-adversary” (identified as China, Russia or North Korea) from selling, delivering, or importing vehicles in the United States. Mercedes-Benz AG faces a direct risk because its two largest shareholders are Chinese: the state-owned BAIC holds 9.98 % and Geely founder Li Shufu holds 9.69 %, together exceeding the 15 % threshold. If the bill becomes law, the company could be excluded from its second-largest market, which accounted for roughly 300,000 U.S. sales last year.

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The provision is part of a broader, bipartisan push to tighten national-security controls on the auto sector. Similar language appears in the Connected Vehicle Security Act of 2026, which bars “any direct or indirect equity interest by a foreign-adversary government” from participating in the U.S. connected-vehicle market after January 1 2027. The measure follows earlier attempts to secure U.S. content rules in the renegotiated USMCA, where negotiators are seeking 82 % North-American content for vehicles and higher thresholds for “high-wage” parts.

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• BAIC – Beijing Automotive Industrial Corp., state-owned Chinese automaker (9.98 %).

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• Li Shufu – Founder and chairman of Geely (9.69 %).

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• Mercedes-Benz U.S. operations – Two assembly plants and over 10,000 U.S. employees.

Could this proposed law kick out Mercedes-Benz from the US?

• Combined Chinese ownership: ? 19.7 %.

Could this proposed law kick out Mercedes-Benz from the US?

• U.S. sales in 2023: ? 300,000 vehicles (second-largest market).

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• Domestic workforce: > 10,000 employees.

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

A ban would eliminate Mercedes-Benz’s U.S. sales, jeopardizing hundreds of thousands of jobs in dealerships, parts supply, and manufacturing. The loss would also affect U.S. tax revenue and could set a precedent for other legacy brands with foreign investors.

Could this proposed law kick out Mercedes-Benz from the US?

Mercedes-Benz’s spokesperson said:

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

> “We have and will continue to work with lawmakers in good faith to ensure that any legislation allows the company to serve its U.S. customers, dealers, employees and suppliers.” — Mercedes spokesperson

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U.S. officials have framed the language as a safeguard against “surveillance by a foreign government,” noting bipartisan support for protecting American consumers. The bill remains pending Senate approval and may be amended.

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

Industry observers argue the provision is overly broad. Volvo, also owned by Geely, secured a waiver under existing law, suggesting that exemptions are possible. Critics warn that the bill could unintentionally “shut down” legacy brands while targeting newer Chinese entrants, creating an uneven competitive landscape.

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• Some sources report Mercedes-Benz “has not expressed concern,” while others cite the company’s active dialogue with lawmakers.

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• The bill’s definition of “foreign-adversary” and the treatment of indirect ownership remain ambiguous, leaving the exact scope of the ban unclear.

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• “The language is unambiguous,” — former automotive policy advisor and lobbyist

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• “any direct or indirect equity interest by a foreign-adversary government.” — Motor Vehicle Modernization Act of 2026 (bill text)

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• “Similar language does appear in the Connected Vehicle Security Act of 2026, which says this: On and after January 1, 2027, the importation, manufacture, sale, resale, or introduction into interstate commerce in the United States of a connected vehicle is prohibited if— (A) the country of origin of the connected vehicle is a covered country or the connected vehicle is designed within a covered country, without regard to whether— (i) at the time of importation, sale, resale, or introduction, the vehicle is equipped with any covered software or connected vehicle hardware subject to a prohibition under paragraph (2) or (3); or That’s China, for sure, since Russian car manufacturing is on its back foot and not exporting anything soon.” — Connected Vehicle Security Act of 2026

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

• “Mercedes-Benz may be shut out of U.S. market under bill aimed at Chinese automaker ownership.” — CNBC headline

Mercedes Could Be Banned From Selling Cars In The US Over Chinese Ownership

The bill was voted out of committee in May, with an amendment reported on May 21. It must still pass the Senate and be signed by the President. Lawmakers are expected to consider exemptions for legacy brands, while trade talks with Mexico continue to reshape North-American content rules. Stakeholders are monitoring both legislative developments and potential regulatory waivers that could determine Mercedes-Benz’s future in the United States.

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