Chinese Shareholders Put Mercedes at Risk of US Ban

A bipartisan Senate bill targeting foreign influence over connected vehicles could force changes to Mercedes-Benz’s shareholder structure or require the company to seek a federal waiver by 2030. Chinese investors hold nearly 20% of the German automaker.

A Mercedes-Benz dealership in California, where the German automaker could face new restrictions under a proposed US law targeting Chinese ownership. Photo: Mario Tama/Getty Images

A US bill aimed at curbing Chinese influence over connected vehicles could have far-reaching consequences for Mercedes-Benz. The Senate Commerce Committee has approved the Connected Vehicle Security Act of 2026 and advanced it to the full Senate for consideration. The bill is sponsored by Republican Senator Bernie Moreno of Ohio and Democratic Senator Elissa Slotkin of Michigan.

The legislation is intended to prevent China and other countries designated by Washington as adversaries from gaining access to US vehicle data through software, sensors or communications systems. Critics warn that modern cars could be used to track people’s movements, transmit sensitive information or, in an extreme case, be manipulated remotely. The bill therefore covers not only vehicles made in China, but also manufacturers with substantial Chinese ownership.

One provision could bar companies with more than 15% Chinese ownership from the US market. Mercedes exceeds that threshold: Chinese state-owned automaker BAIC holds 9.98% of its voting rights, while Geely founder Li Shufu holds an additional 9.69%. Together, their stakes amount to 19.67%.

If enacted in its current form, the legislation could prevent Mercedes from manufacturing, importing or selling connected vehicles in the United States beginning in 2030. That would include cars built at US plants. The company could apply to the Commerce Department for an exemption.

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Mercedes Defends Its Ownership Structure

Mercedes rejects the suggestion that it is subject to Chinese control. No single Chinese shareholder owns more than 10%. BAIC and Li Shufu are passive investors, hold no seats on the supervisory board and cannot influence operational decisions. The company argues that combining two independent shareholdings says little about the extent of any actual control.

Mercedes also points to its long-standing and substantial presence in the United States. It directly employs about 10,600 people there and, according to its own calculations, supports nearly 160,000 jobs. Its plant in Tuscaloosa, Alabama, has produced SUVs for three decades, while Sprinter vans are manufactured in Charleston, South Carolina.

The US is one of the company’s most important markets. In 2025, Mercedes sold 303,200 passenger cars and 40,000 vans there. Excluding it from the market would therefore not target a Chinese manufacturer seeking to enter the United States from abroad, but a German company with plants, dealerships and suppliers across the country.

Some members of the Senate committee have also expressed doubts about the proposed threshold. Republican Chairman Ted Cruz warned that the provision would apply to Mercedes despite its US production and the passive nature of its Chinese shareholdings. He openly questioned whether the 15% threshold had been chosen to weaken a German competitor to US manufacturers. Cruz called for changes before the bill becomes law.

Moreno likewise stressed that his goal was not to ban Mercedes sales. The company would have until 2030 to find a solution and could apply for an exemption if necessary. That assurance does not eliminate the risk, however: a company of Mercedes’ size would have to rely on a political decision by the Commerce Department to retain access to the US market.

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Washington Widens Its Net

The bill builds on rules that have already largely kept Chinese vehicle software and Chinese car brands out of the US market. The restrictions would now be extended to companies with significant Chinese ownership. Brands such as Polestar and Volvo, both closely tied to Geely, would be among those most directly affected.

The security concerns are real. Connected vehicles are equipped with cameras, microphones, location-tracking technology and always-on communications systems. Manufacturers and software providers can therefore collect information that goes far beyond a vehicle’s technical condition. Washington does not want this infrastructure controlled by companies that could be subject to Chinese law or state pressure.

Mercedes, however, presents a different case. Although the two Chinese stakes add up to almost one-fifth of the company’s voting rights, Mercedes says they do not amount to joint control. BAIC is also a long-standing Mercedes production partner in China, while Li Shufu acquired his stake in 2018. Such holdings were previously regarded as a routine feature of the globally interconnected auto industry, but are now being viewed through a national security lens.

There is still a long way to go before any sales ban could take effect. The bill must pass the full Senate and the House of Representatives. Any differing versions would then have to be reconciled before the legislation could be signed by the president. The broad support it received in committee nevertheless shows how sharply the political climate has turned against Chinese investment.