The Senate Commerce Committee approved legislation Wednesday that would cap Chinese ownership of automakers selling vehicles in the U.S. at 15%, a move that could ultimately bar Mercedes-Benz from the market.
The details: The vote follows intense lobbying by Mercedes-Benz to raise the ownership cap, as 20% of the automaker is owned by Chinese entities, with the German automaker arguing that those shareholders have limited influence over the company's operations.
Mercedes sought to increase the ownership cap to 25%, but the proposal failed to gain enough support from Senate Commerce Committee members.
Sen. Bernie Moreno, who introduced the bipartisan bill with Sen. Elissa Slotkin, said Mercedes-Benz would have until 2030 to comply, according to Reuters.
Moreno also said the automaker could receive waivers from the ownership requirement if necessary.
The committee's approval of the Connected Vehicle Security Act of 2026 sends the legislation to the full Senate for consideration.
What they’re saying: “China’s auto industry was not built to compete; it was built to destroy American manufacturing, gut the middle class, and undermine our national security,” said Sen. Moreno, per a press statement. “For decades, D.C. globalists propped up Chinese businesses—now it’s time for Congress to stop this cancer before it spreads through the American auto market.”
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
Get insights trusted by 55,000+ car dealers. Free, fast, and built for automotive leaders.
Why it matters: The bill could reshape the competitive landscape for automakers with Chinese ownership ties, signaling that national security concerns are playing a growing role in determining which brands and vehicles can be sold in the U.S.
Between the lines: GM has found itself at the center of the debate over whether Mercedes-Benz could be forced out of the U.S. market after Sen. Ted Cruz claimed the Detroit automaker supports keeping the ownership cap in place.
Cruz alleged GM wants the provision to remain because it would remove Mercedes-Benz as a competitor and improve Cadillac's position in the luxury market.
Moreno, on the other hand, said that GM plans to shift production of the China-built Buick Envision to the U.S. for the 2028 model year.
Bottom line: The legislation marks another step toward tighter restrictions on Chinese ownership in the U.S. auto industry, which could ultimately affect brand competition, vehicle availability, and long-term product strategies if it becomes law.
A quick word from our partner
Data alone won't improve performance.
Zurich Advisor IQ helps dealers turn F&I performance metrics into meaningful action. With AI-powered insights, you can:
See where performance breaks down across real deals.
Understand the direct impact on PVR and profitability.
Coach more effectively, using data-backed insights.
Track measurable improvement over time.
Request a live demo to see how Zurich Advisor IQ helps turn performance data into performance gains.
