- A bill that would ban automakers with more than 15% stake by Chinese entities has progressed in the Senate.
- One automaker caught up in the crossfire is Mercedes-Benz, which has a nearly 20% stake held by Chinese investors.
- U.S. lawmakers say General Motors and the UAW are pushing for the low ownership threshold.
Bipartisan legislation that would bar automakers with more than 15% ownership by Chinese entities from selling cars in the U.S. made it out of the U.S. Senate Commerce Committee on Wednesday.
The bill, which proposes limiting the overall ownership stake and tech supplied by covered entities (such as China), advanced the committee on Wednesday, moving it closer to being signed into law. If it passes as written, which is not guaranteed, there could be an unexpected luxury brand caught up in the crossfire.
Rather than look at just the physical makeup of a car, the assembly location, or the software controlling its circuitry—as a similar rule already in effect does—the bill focuses on the entities with ownership stake in a particular company. This is what makes the bill tougher than just outright banning a car assembled in Guangdong or with a few too many parts from a supplier out of Shenzhen.
Photo by: Mercedes-Benz
In fact, it’s got some far-reaching consequences that could impact even well-established automakers from Europe. Mercedes-Benz is one of those brands, as Chinese automaker BAIC and the founder of Geely, Li Shufu, both own nearly 10% of the company. Combined, Chinese entities own nearly 20% of the German automaker.
Senator Ted Cruz, the committee’s chair, said that the bill, as written, would bar Mercedes-Benz from selling cars in the U.S., according to Reuters. He also said the bill needed to change before getting signed into law and that the U.S. “would never consider” banning Mercedes-Benz.
He claimed that General Motors was pushing the strict provision in order to strengthen the Cadillac brand. A GM spokesperson told InsideEVs that the automaker “supports policies that protect and strengthen American manufacturing and the global competitiveness of U.S. automakers,” and that “we can compete with anyone in the world when we are given a level playing field.”
Mercedes-Benz, meanwhile, did not immediately respond to an InsideEVs request for comment. The automaker told Reuters it “continues to support legislation designed to protect U.S. national security. Mercedes-Benz also remains committed to ensuring that any legislation does not impact our operations.”
Ohio Senator Bernie Moreno, one of the original co-sponsors of the bill, noted that Mercedes would have until 2030 to comply or seek a waiver.
China’s automotive sector has had quite the target on its back from U.S. legislators. And while ownership is the newest wrench that the Senate has thrown into the manufacturing cog, it isn’t the only one. The same bill would also codify restrictions to keep tech linked back to China out of cars on U.S. roads. Lawmakers say that connected cars could collect sensitive data that poses a threat to national security if transmitted outside of U.S. borders.
If passed as written, the Connected Vehicle Security Act would expand on an existing Commerce Department rule that effectively axed the Polestar brand in the U.S. It would prohibit any connected vehicle made, designed, or with an ownership stake associated with any covered entity (China, Iran, North Korea, or Russia) from being imported or sold in the U.S. beginning in 2027. Three years later, in 2030, the same prohibition would extend from the software used in connected vehicles to the hardware as well.