The Senate Commerce Committee approved bipartisan legislation Wednesday designed to strengthen existing restrictions on Chinese automakers operating in the United States. The Motor Vehicle Modernization Act of 2026 establishes a 15% threshold for Chinese ownership, aimed at preventing vehicles with Chinese-linked technology from entering the American market over national security concerns related to data collection in connected vehicles.
The legislation has drawn scrutiny from committee leadership regarding potential unintended consequences. Chairman Ted Cruz raised concerns that Mercedes-Benz could be inadvertently caught by the ownership threshold, as two Chinese investors hold a combined stake exceeding the proposed limit. BAIC, a state-owned Chinese automaker, controls approximately 9.98% of Mercedes-Benz shares, while Geely founder Li Shufu holds 9.69%. Cruz stated the bill would require modification before enactment to prevent such an outcome.
Senators Bernie Moreno and Elissa Slotkin sponsored the legislation, with Morero characterizing the measure as essential to preserving American industrial capacity. Under current bill provisions, affected companies would receive until 2030 to achieve compliance with ownership restrictions and could petition for exemptions. Mercedes-Benz operates more than 10,000 employees in the U.S. and maintains assembly facilities in Alabama and South Carolina.
Cruz also raised questions about potential competitive motivations, suggesting General Motors may support certain provisions to disadvantage Mercedes-Benz and strengthen Cadillac’s market position. GM currently leads U.S. automakers in sales. Neither GM nor Mercedes-Benz provided immediate responses regarding the accusations or legislation.
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