US bill may inadvertently affect Mercedes due to Chinese shareholders
A Senate proposal targeting automakers owned by Chinese entities has moved another step forward. This bill aims to restrict access to the US market for companies linked to China, but has unexpectedly put German giant Mercedes at risk.
The issue is that Chinese shareholders hold nearly 20% of Mercedes shares, significantly exceeding the proposed maximum of 15%. Senator Ted Cruz insists that Mercedes is not the target and assures that changes will be made before the law is adopted.
Historical context and modern threats
Seventy years ago, Americans were concerned about Mercedes’ historical ties to Nazi Germany. Today, the focus is on another ’empire of evil’—China. A new Senate proposal, designed to prevent companies linked to China from entering the US market, has accidentally put Mercedes in the crosshairs. However, one influential lawmaker has promised to protect the company.
The possibility of a ban on Mercedes in the US arose after the Senate Commerce Committee advanced legislation that restricts automakers with Chinese ownership above a certain threshold. The unexpected twist is that Mercedes has two large Chinese investors, whose combined stake amounts to nearly 20%.
Related: Volvo won the battle against the US ban. Polestar isn’t even trying
Under the current version of the bill, this could be enough to create problems for the German automaker. The Chinese investors are BAIC, a Chinese state-owned automotive giant, and Geely founder Li Shufu. Together, their stakes exceed the proposed limit of 15% being considered by US lawmakers.
Lawmakers assure: no full ban
Before Mercedes dealers start emptying showrooms, key lawmakers are already signaling that a full ban is not planned. According to CNBC, Senator Ted Cruz acknowledged the issue during committee discussions, stating:
We would never consider banning Mercedes-Benz.
Senator Bernie Moreno also noted that Mercedes will have until 2030 to resolve the ownership situation and can apply for exemptions. It appears that any drastic action is still far off.
Ban on Chinese software
However, this episode highlights how aggressively the US is trying to reduce automotive dependence on China. Chinese software laws introduced by the Biden administration have already forced Polestar (majority-owned by Chinese Geely) to leave the US market this year. Connected vehicle rules ban Chinese software for connectivity starting with the 2027 model year, and Chinese hardware starting with the 2030 model year, due to national security concerns related to vehicle data and communication systems.
According to Reuters, the industry is struggling to adapt. Suppliers are rushing to replace Chinese connectivity components, automakers are conducting supply chain audits, and some companies are already applying for exemptions. However, according to industry executives, even eliminating Chinese hardware could increase costs by up to 15%.
Industry adaptation and new challenges
The situation surrounding Mercedes demonstrates the complexity of global supply chains in the automotive industry. Even companies that are not fundamentally Chinese can be affected by new restrictions due to partial ownership or partnerships. This is forcing the entire industry to reconsider its ownership and supply structures, which could lead to significant cost increases and slower innovation. At the same time, lawmakers’ willingness to make exceptions for brands like Mercedes suggests that the bill may target specific companies more than seeking a total exclusion of any Chinese influence.
