A proposed Senate bill would ban connected vehicle sales from automakers with more than 15 percent Chinese ownership, a threshold Mercedes-Benz exceeds, putting one of America's most established car brands in regulatory crosshairs.
The Connected Vehicle Security Act, which has advanced to the Senate floor from the Committee on Commerce, Science, and Transportation, draws a hard line: any automaker with more than 15 percent Chinese ownership would be barred from selling internet-connected vehicles in the United States. Mercedes-Benz, with roughly 10 percent of its shares held by the Chinese state-owned BAIC Motor Corp. and another 10 percent held by Li Shu Fu, the billionaire founder and chairman of Chinese manufacturer Geely, sits well above that cutoff, The U.S. Sun reported.
The bill's rationale centers on national security. Connected vehicles, cars and trucks equipped with internet access, GPS, cameras, and sensors, transmit enormous volumes of data. Lawmakers behind the legislation argue that foreign-linked ownership creates an unacceptable risk that such data could be accessed, exploited, or weaponized by hostile governments. The bill would give automakers until 2030 to comply and allows companies to apply for a waiver through the U.S. Commerce Department.
Not every Republican is on board with the bill as written. Senator Ted Cruz of Texas, who sits on the Commerce Committee, said he supports the legislation's goals but accused its backers of rigging the ownership threshold to single out Mercedes-Benz. Cruz called the 15 percent cutoff "a very direct shot to inflict pain" on the German automaker, alleging the United Auto Workers pushed the provision as retaliation after workers at Mercedes' factory in Tuscaloosa, Alabama, voted against joining the union in 2024.
Cruz went further, claiming the threshold was drawn to benefit General Motors' Cadillac brand, a direct Mercedes competitor in the U.S. luxury market. He called for the rigid percentage test to be replaced with qualitative national security evaluations modeled on the work of the Committee on Foreign Investment in the United States, the interagency panel that already reviews foreign acquisitions for security risks.
Cruz said he "wants this bill to pass" but warned it "will not become law" in its current form.
Senator Bernie Moreno, the Ohio Republican who co-sponsored the bill, pushed back. He disputed Cruz's characterization and pointed to the compliance timeline and waiver process as safeguards against unintended harm.
Moreno told reporters:
"What we'll certainly never do, nor would anybody intend to do, is ban the sale of Mercedes-Benz automobiles in America."
Moreno's own family has a stake in the outcome, his son operates a Mercedes-Benz franchise, a detail disclosed in the reporting but not raised as a formal conflict by other senators.
Mercedes-Benz responded with a lengthy statement emphasizing its deep American footprint. The company said no single shareholder holds more than 10 percent of its stock, that its major shareholders have no seats on its supervisory board, and that all operational decisions are made solely by its board of management, not by outside investors in Beijing or anywhere else.
The company said it fuels 160,000 jobs across the United States, assembles vehicles at plants in Tuscaloosa, Alabama, and Charleston, South Carolina, and works with 386 dealer partners in 49 states. Mercedes said it has invested an average of $1 billion annually in U.S. operations over the past decade and plans to pour another $7 billion into its American footprint through the end of the decade.
The broader auto industry is already grappling with trade policy disruptions. Automakers recently booked billions in expected tariff refunds after a Supreme Court ruling, underscoring how sensitive the sector has become to shifts in Washington's posture on international commerce.
Mercedes also stressed its longevity in the American market, a presence dating to 1888, and cited 5 million cars and vans currently on U.S. roads, more than 5 million SUVs assembled domestically, and nearly 500,000 vans built in the country. The company said it supports legislation protecting national security but insisted any law must not disrupt its operations.
Bloomberg reported that Mercedes has been lobbying Congress to raise the permitted Chinese ownership threshold from 15 percent to 25 percent, a change that would bring the company safely below the cutoff without requiring it to force out its Chinese shareholders.
The legislation arrives against a backdrop of mounting bipartisan anxiety over Chinese penetration of American manufacturing and technology. The auto sector has become a focal point. An Ohio factory is already leading the auto industry's push to replace Chinese vehicle hardware, a sign that manufacturers themselves recognize the political and security risks of dependence on Chinese-sourced components.
The political dynamics extend beyond the Senate floor. In Michigan, Democratic Senate candidate Elissa Slotkin reversed years of silence to oppose a CCP-tied EV battery plant built by Gotion, a company whose corporate bylaws require it to "carry out Party activities in accordance with the Constitution of the Communist Party of China." Slotkin had signed a confidential agreement with state officials covering the project before her reversal, which the Washington Free Beacon reported came only under election pressure from her Republican opponent.
The pattern is consistent: Chinese ownership and influence in the American auto sector have become a live political liability, and lawmakers in both parties are scrambling to get on the right side of it, some more belatedly than others.
The ongoing shift in consumer preferences between gas and electric vehicles adds another layer of complexity. As the market evolves, the question of who owns and controls the technology inside American cars, and who has access to the data those cars generate, carries consequences far beyond any single brand's bottom line.
Several critical details remain unresolved. The bill's definition of "connected vehicles" has not been publicly clarified, and whether it covers every Mercedes model sold in the U.S. or only certain categories could drastically change the scope of the ban. It is also unclear whether the legislation applies only to new sales or to vehicles already on American roads.
The UAW has not publicly responded to Cruz's allegation that the union motivated the bill as payback for the 2024 Alabama vote. General Motors and Cadillac have likewise not addressed Cruz's claim that the 15 percent threshold was drawn to benefit them at Mercedes' expense.
The auto industry's ongoing battles over tariff policy and pricing show how quickly Washington's trade decisions ripple through showrooms and factory floors. If the Connected Vehicle Security Act becomes law without amendment, Mercedes-Benz, a company that has built cars in America for longer than most American automakers have existed, would face a choice: restructure its shareholder base or surrender one of the world's largest car markets.
National security is a serious reason to act. But if Cruz is right that the bill's threshold was drawn to punish one company for a union vote, then Congress owes voters a cleaner standard, one that protects the country without picking winners and losers on the factory floor.