House Bill Could Block Mercedes-Benz Sales in U.S. Over Chinese Ownership Stakes

A House committee has advanced a provision in the Motor Vehicle Modernization Act that would prohibit automakers with at least 15% ownership by foreign adversary countries—including China—from selling or producing vehicles in the U.S. The move threatens Mercedes-Benz Group AG’s U.S. operations, as China’s state-owned BAIC Motor Corp. holds nearly 10% of the German automaker’s stock, while Geely founder Li Shufu also holds nearly 10%, potentially exceeding the 15% threshold. The bill remains in early stages, requiring further House and Senate approval and likely revisions before becoming law. It may be incorporated into a broader transportation package.

Mercedes-Benz, which declined to comment, is reportedly in private discussions with U.S. officials to address the issue. The provision includes exemptions for companies already producing and selling vehicles in the U.S., but these do not apply to firms with equity stakes held by state-owned enterprises. The legislation reflects growing bipartisan concern in Washington over China’s influence in the domestic auto industry, particularly regarding connected vehicle technology and national security risks. Mercedes-Benz has deep U.S. roots, operating a major SUV production hub in Alabama since the 1990s, with over 4.5 million vehicles manufactured there and two-thirds of output exported.

The push to restrict Chinese-linked automakers follows recent administration actions, including a Commerce Department exemption for Volvo Car AB, majority-owned by Geely, from a 2027 ban on connected vehicles tied to China. Lawmakers like Sens. Elissa Slotkin (D-MI) and Bernie Moreno (R-OH) are advocating for stricter measures, arguing that Chinese vehicles pose surveillance risks and benefit from unfair subsidies. Their bills aim to permanently codify restrictions on Chinese-linked automotive technology.