Senate China auto bill hits Mercedes-Benz snag
A Senate panel moved a bipartisan vehicle-security bill forward as Ted Cruz warned its ownership limit could sweep in Mercedes-Benz.
By Sal Moretti · Money Reporter
2 min read
A Senate committee pushed forward a bipartisan auto bill Wednesday that targets Chinese-linked carmakers and vehicle technology, while its chairman warned the measure could accidentally slam the door on Mercedes-Benz in the U.S.
The Senate Commerce Committee advanced the Motor Vehicle Modernization Act of 2026, legislation aimed at writing federal restrictions into law over national security concerns tied to connected vehicles and Chinese-linked technology.
Sen. Ted Cruz, the Texas Republican who chairs the committee, said during the markup that the bill’s 15% Chinese ownership threshold could catch Mercedes-Benz because two Chinese investors together hold nearly 20% of the company’s shares.
Cruz said lawmakers “would never consider” banning Mercedes-Benz and said the measure would need revisions before it could become law.
According to Mercedes-Benz’s shareholder information cited in the debate, its two largest individual shareholders are BAIC, the Chinese state-owned automaker formerly known as Beijing Automotive Industrial Corp., with a 9.98% stake, and Geely founder Li Shufu, with 9.69%.
Security bill, luxury-car headache
The bill is designed to keep Chinese-linked vehicle technology out of the U.S. market. Supporters have framed it as a national security move, arguing that connected cars could gather sensitive data.
Sen. Bernie Moreno, an Ohio Republican who introduced the bill with Sen. Elissa Slotkin, a Michigan Democrat, cast the legislation in stark industrial terms during the committee session.
“We’re preventing an absolute, total, and complete destruction of our industrial base,” Moreno said.
Moreno also said Mercedes-Benz would have until 2030 to meet the ownership limit and could seek a waiver.
Mercedes-Benz previously declined to comment on the legislation, according to CNBC, but said it employs more than 10,000 people in the U.S. and runs assembly plants in Alabama and South Carolina.
Cruz points at GM
The markup also brought a sharp accusation from Cruz aimed at General Motors. Cruz accused GM of backing the ownership provision to hurt Mercedes-Benz and strengthen Cadillac’s position.
“GM is pushing for this provision to get Mercedes-Benz out of the market,” Cruz said.
CNBC reported that GM and Mercedes-Benz did not immediately respond to requests for comment. GM is the top-selling automaker in the U.S.
The committee vote keeps the legislation alive, but Cruz’s warning shows the bill may face changes before any final passage. For now, the fight over Chinese-linked auto technology has created an unlikely Washington subplot: a security crackdown that could put one of Germany’s best-known luxury brands in the blast zone.
This story draws on original reporting from CNBC.