Mercedes-Benz crosses proposed Chinese ownership cap as Senate seeks fix

Mercedes faces a proposed ownership cap

Mercedes-Benz could be affected by the Connected Vehicle Security Act of 2026, a U.S. Senate bill targeting vehicles with ties to Chinese ownership. The Senate Commerce Committee approved the measure in July, moving it closer to consideration by the full Senate.

The bill would block automakers with more than 15% ownership by Chinese entities from selling vehicles in the United States. Mercedes-Benz has nearly 20% passive ownership held by Chinese entities, placing its current ownership structure above the proposed limit.

Moreno says Mercedes will keep selling

Sen. Bernie Moreno said the final version of the Connected Vehicle Security Act would ensure Mercedes can continue selling vehicles in the United States. The Ohio Republican sponsors the measure with Democratic Sen. Elissa Slotkin, and the bill remains pending in the Senate.

The planned request for unanimous consent did not advance before the Senate recessed because supporters had not resolved Sen. Rand Paul’s concerns about Mercedes. Further Senate action is expected after lawmakers return in November, while the House would still need to act on the legislation.

The bill sets a 15% ownership limit

The proposed legislation uses 15% Chinese ownership as a key threshold for determining which automakers could sell vehicles in the United States. Companies above that level could be barred from the U.S. market if the measure becomes law in its proposed form.

Mercedes currently exceeds that threshold because Chinese entities together hold nearly 20% passive ownership in the German automaker. The difference between its current ownership level and the proposed limit is roughly 5 percentage points.

Mercedes has Chinese ownership ties

Chinese entities hold nearly 20% of Mercedes through passive ownership, placing the automaker above the proposed limit. The ownership level is nearly 5 percentage points above the 15% threshold set by the Senate legislation.

The proposed measure uses Chinese ownership levels to determine which automakers could face U.S. sales restrictions. Mercedes currently exceeds that threshold, although Moreno has said lawmakers do not intend to stop the automaker from selling vehicles in the United States.

Volvo is also part of the talks

Volvo Cars could also be affected because China’s Geely Holding owns a majority stake in the Swedish automaker. Moreno said lawmakers were discussing ways to ensure Volvo could continue selling vehicles in the United States.

Volvo previously underwent a detailed inquiry by the U.S. Department of Commerce and was allowed to continue selling vehicles in the country. Its majority Chinese ownership also places the automaker above the ownership threshold included in the proposed congressional measure.

Polestar faces a model year 2027 limit

Polestar was denied authorization by the U.S. Commerce Department to sell vehicles in the United States from model year 2027 onward under the federal Connected Vehicles Rule. Polestar said it will continue selling earlier model-year vehicles from existing U.S. inventory before ending new-vehicle sales.

Volvo received a specific authorization under the same federal rule, producing a different outcome for another Geely-controlled automaker. The proposed congressional legislation would add a separate 15% ownership or control threshold for connected vehicle companies tied to covered countries.

Aston Martin exceeds the proposed cap

Aston Martin could be affected because Geely owns 17% of the British luxury automaker, according to Moreno. That ownership level places Aston Martin 2 percentage points above the 15% threshold included in the proposed Senate legislation.

Moreno specifically identified Aston Martin as one of the automakers that could face restrictions under the measure. The proposed ownership test could therefore affect companies based outside China when Chinese entities hold stakes exceeding the bill’s stated limit.

Lotus has majority Geely ownership

Lotus could also face restrictions because Geely holds a majority stake in the British sports car maker. Moreno included Lotus among the automakers that could be barred under the proposed legislation because of their ties to Chinese ownership.

A majority stake places Lotus well above the bill’s proposed threshold of more than 15% ownership by Chinese entities. Mercedes, Volvo, Aston Martin, and Lotus have different ownership structures, but each has Chinese ownership exceeding the proposed limit.

Rand Paul objected over Mercedes

Sen. Rand Paul of Kentucky opposed expedited passage, saying the bill unfairly targeted Mercedes. Paul said the legislation could move forward if Mercedes were removed, arguing that a bill should not directly target a single company.

On Sept. 24, Moreno and Slotkin delayed their planned request for unanimous consent while they continued talks with Paul. By Sept. 30, supporters had postponed Senate action until lawmakers return in November because Paul’s concerns about Mercedes had not been resolved.

The bill has bipartisan backing

The Connected Vehicle Security Act has support from lawmakers in both major political parties, including Republican Moreno and Democrat Slotkin. The Senate Commerce Committee advanced the legislation in July as lawmakers sought stronger restrictions involving vehicles, software, and hardware tied to certain foreign entities.

Slotkin said all Senate Democrats supported moving forward with the measure. The House version had more than 100 cosponsors, while automakers and legislative aides sought full congressional passage in 2026.

Existing rules phase in by model year

The U.S. Commerce Department finalized the Connected Vehicles Rule in January 2025, and it took effect on March 17, 2025. Restrictions on covered software and sales by connected vehicle manufacturers tied to China or Russia apply beginning with model year 2027.

Restrictions on covered vehicle connectivity hardware begin with model year 2030, or Jan. 1, 2029, for hardware without a model year. Washington also maintains tariffs exceeding 100% on Chinese electric vehicles, creating a separate trade barrier from the connected vehicle restrictions.

Trump discussed Chinese U.S. factories

President Donald Trump said in September 2026 that he would not oppose Chinese automakers building vehicles in the United States. The comments raised concerns among automakers as Congress considered legislation to strengthen restrictions on Chinese vehicles and vehicle technology.

Automakers, suppliers, and dealers urged Trump to maintain policies that restrict Chinese automakers from selling, importing, or manufacturing vehicles in the United States. Their position came as lawmakers continued debating how Chinese ownership rules should apply to established brands such as Mercedes.

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China criticized U.S. restrictions

China’s foreign ministry has criticized previous U.S. proposals to restrict Chinese companies and called for fair competition in line with market-economy principles. The ministry has argued that Chinese vehicles have gained global popularity due to technological innovation and competition in China’s domestic market.

U.S. policymakers have focused on national security concerns involving Chinese technology and the handling of sensitive data by connected vehicles. The proposed Senate legislation would add Chinese ownership levels as another factor in determining which automakers can sell vehicles in the United States.

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Track the Connected Vehicle Security Act as Congress weighs new ownership rules. Watch for updates when the Senate returns to the bill.

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This slideshow was made with AI assistance and human editing.