Mercedes-Benz faces a potential ban on selling connected vehicles in the United States under legislation targeting automakers with significant ownership ties to China.
The Senate Commerce Committee proposed a measure last week that would ban the sale of connected vehicles in the United States by companies more than 15% owned by Chinese entities, which could affect German automaker Mercedes-Benz, in which two Chinese investors have stakes totaling nearly 20%.
Senators Elissa Slotkin, Democrat of Michigan, and Bernie Moreno, Republican of Ohio, sponsored the bipartisan legislation, which would codify and expand restrictions established under the Biden administration, arguing that it “shuts the door to vehicles, software and key components of Chinese origin at every stage, from production, importation to sale, so that data collected on American roads cannot be sent back to the Chinese government.”
“Chinese cars are surveillance systems on wheels, with the ability to collect information on American citizens and transmit that data to Beijing,” Slotkin said in a statement..
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Mercedes-Benz faces a potential ban on selling connected vehicles in the United States under legislation targeting automakers with significant ownership ties to China. (Eric Thayer/Bloomberg via Getty Images / Getty Images)
Moreno said the measure was aimed at preventing “absolute, total and complete destruction of our industrial base.”
“China’s auto industry was not built to be competitive, it was built to destroy American manufacturing, hollow out the middle class and undermine our national security,” he said.
But Sen. Ted Cruz of Texas, who chairs the Commerce Committee, warned that Mercedes-Benz could effectively be priced out of the U.S. market if the legislation becomes law without amendments and said the bill needed to be amended.
Cruz accused General Motors of lobbying for the move aimed at forcing Mercedes-Benz out of the market and making its Cadillac brand more attractive.
“We would never consider” banning Mercedes-Benz sales in the United States, he said.
GM maintained that the legislation is not aimed at any specific automaker, saying it “supports policies that protect and strengthen the U.S. manufacturing industry and the global competitiveness of U.S. automakers.”
The Senate Commerce Committee proposed a measure last week that would ban the sale of vehicles in the United States by companies more than 15% owned by Chinese entities. (ANDREW CABALLERO-REYNOLDS/AFP via Getty Images / Getty Images)
“As we have said many times, we can compete with anyone in the world when we have a level playing field,” GM said.
Mercedes-Benz highlighted its extensive U.S. operations while emphasizing that it “continues to support legislation designed to protect U.S. national security.”
“Mercedes-Benz also remains committed to ensuring that no legislation impacts our operations. The company will continue to protect its employees, dealers, suppliers and customers,” the automaker said.
The bill includes a process by which manufacturers could seek approval from the Commerce Department for vehicles that would otherwise be banned.
Moreno said GM intends to move production of its Chinese-made Buick Envision to the United States for the 2028 model year and that Ford has agreed to move Chinese-made Lincolns to the United States.
“I consider this a big victory,” Moreno said.
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Senator Ted Cruz warned that Mercedes-Benz would be removed from the U.S. market if the legislation becomes law. (Artur Widak/NurPhoto via Getty Images / Getty Images)
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He also said that Google’s autonomous driving vehicle company, Waymo, which has been in talks with Chinese automaker Geely about platforms from China, has pledged to seek a Detroit-based manufacturer for its future platforms.
Cruz said another provision of the bill backed by GM would require automakers to buy more expensive batteries from GM, adding $5,000 to the cost of vehicles.
This comes after the Trump administration Last month, Polestar banned the sale of new connected vehicles in the United States starting with the 2027 model year, as the Swedish automaker is majority owned by Geely.
Polestar’s sister brand and co-founder, Volvo Cars, said in May that it had received the green light to continue selling cars in the United States.
The legislation still must pass the full Senate and House and be signed by the president before becoming law.
Reuters contributed to this report.