The Senate Commerce Committee voted to advance the Motor Vehicle Modernization Act of 2026, bipartisan legislation designed to strengthen restrictions on Chinese automakers accessing the U.S. market. The measure seeks to codify federal prohibitions rooted in national security concerns, specifically regarding technology in connected vehicles that could potentially collect sensitive data.
The bill establishes a 15% Chinese ownership threshold as the regulatory standard. However, the provision has created an unintended consequence: Mercedes-Benz would fall under the restriction due to Chinese investment holdings. Two investors with ties to China collectively own nearly 20% of the automaker’s shares, including Beijing Automotive Industrial Corp., a state-owned entity holding 9.98%, and Geely founder Li Shufu with 9.69%.
Senate Commerce Committee Chairman Ted Cruz, R-Texas, highlighted the problem during the committee markup, cautioning that the provision would need modification before the legislation becomes law to prevent unintentionally excluding Mercedes-Benz from the American market. Sen. Bernie Moreno, R-Ohio, who introduced the bill alongside Sen. Elissa Slotkin, D-Mich., indicated that Mercedes-Benz would have until 2030 to bring ownership into compliance and could pursue a waiver to avoid the restriction.
Cruz also raised concerns about potential competitive motivations behind the provision, suggesting that General Motors was backing the measure to disadvantage Mercedes-Benz and strengthen Cadillac’s market position. Mercedes-Benz, which employs over 10,000 workers in the U.S. and operates assembly facilities in Alabama and South Carolina, has not formally responded to inquiries about the legislation. General Motors and Mercedes-Benz did not immediately comment on the committee’s action.
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