Mercedes-Benz is at risk of being banned from selling connected vehicles in the US under new bipartisan Senate and House bills aimed at limiting Chinese influence in the automotive sector. These bills propose a 15% cap on Chinese ownership for automakers selling connected cars. Mercedes-Benz currently exceeds this threshold, with nearly 20% Chinese ownership, split between China's state-owned BAIC Motor (just under 10%) and Geely Chairman Li Shufu (a similar amount).
The German automaker is actively lobbying US lawmakers to amend the legislation, pushing for the ownership cap to be raised to 25%. Alternatively, Mercedes-Benz is advocating for a qualitative national security review instead of a fixed numerical percentage, believing such an approach would be more favorable to its position. The company emphasizes that neither BAIC nor Geely's chairman holds more than 10% individually, has board representation, or exerts operational control.
The stakes are significant for Mercedes-Benz, which sold over 315,000 passenger cars and vans in the US last year. The company has invested heavily in its US manufacturing, pledging an additional $4 billion to its Alabama plant through 2030. The proposed compliance deadline for the Senate bill is also 2030. Lawmakers are considering various amendments, including the 25% ownership threshold, which aligns with limits for component and software suppliers, or replacing the percentage cap with a national security review, a move generally favored by Mercedes-Benz. The House Select Committee on China has publicly objected to Mercedes' lobbying efforts.
While the Alliance for Automotive Innovation supports the bill's intent to counter China's automotive ambitions, it stresses the importance of precision in the legislative wording. The ultimate fate of Mercedes-Benz in the US market hinges on whether lawmakers prioritize a strict percentage-based approach or a more nuanced assessment of control and national security risk.
