Mercedes-Benz could be banned from selling or building cars in the United States under a new bipartisan bill. congress It aims to restrict automakers with ties to Chinese government-related ownership, CNBC reported.
The proposed legislation, called the Motor Vehicle Modernization Act of 2026, aims to prevent companies with direct or indirect equity interests in “foreign adversary governments” from importing, selling or producing vehicles in the United States.
China classified as a foreign adversary under the Act Russia and North Korea.
Why Mercedes-Benz is flagged
Mercedes-Benz’s shareholder structure raises concerns. Its largest individual shareholder is Chinese state-owned automaker BAIC Group, which holds 9.98% of the company’s shares.
BAIC Group was formerly known as Beijing Automotive Industry Corporation.
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In addition, Chinese billionaire and Geely founder Li Shufu holds 9.69% of the shares through his investment company Tenaciou3 Prospect Investment. The combined holdings of the two companies account for approximately 19.67% of Mercedes-Benz Group AG.
Sources familiar with the legislation told CNBC that, depending on the interpretation, this ownership structure could subject Mercedes-Benz to restrictions under the bill.
What does the bill propose?
If enacted in its current form, the bill would ban affected automakers from importing, selling or manufacturing vehicles in the United States for five years.
It also includes exemptions for companies that have been producing passenger vehicles in the United States for at least five years before January 1, 2026.
However, such exemptions may not apply if the company has direct or indirect ownership ties to the government of a foreign counterparty.
The legislation, sponsored by House Energy and Commerce Committee Chairman Brett Guthrie, is currently limited to the House, with no Senate companion bill yet.
Also read: A deeper look at U.S.-China security competition
Potential wider impact on the automotive industry
The ownership threshold could also affect other automakers with China-related investments, including Volvo, Lotus, Karma Automotive and Faraday Future.
Stephen Ezell of the Information Technology and Innovation Foundation told CNBC that bringing Mercedes-Benz into the scope of the bill could have unintended consequences.
“If Mercedes were included in the bill, I think that would be an unintended consequence that could lead to a loss of jobs and profits,” Ezell said.
Mercedes-Benz U.S. Operations
Mercedes-Benz has significant manufacturing operations in the United States, including major plants in Alabama and South Carolina.
The company said its Tuscaloosa, Ala., plant has produced more than 5 million vehicles since 1997, while its South Carolina plant has produced more than 450,000 passenger vans since 2006.
The bill is part of Washington’s broader effort to limit China’s influence in key U.S. industries, particularly auto manufacturing and connected car technology.
Industry groups say they support efforts to strengthen national security but warn that unclear ownership definitions could have unintended consequences for global automakers operating in the U.S. market.
