Mercedes-Benz is lobbying to loosen a bipartisan Senate bill that could bar the automaker from selling any connected vehicles in the US due to its partial ownership by Chinese entities. The bill, first introduced in April by Senators Elissa Slotkin and Bernie Moreno, sets a 15% cap on Chinese ownership for automakers selling connected cars, a threshold Mercedes exceeds at nearly 20%.

That 20% stake is split almost evenly between two shareholders: China’s state-owned BAIC Motor and Geely Chairman Li Shufu. Mercedes-Benz has stressed that neither controls more than 10% individually, has board representation, or exerts any meaningful influence over operational decisions. As such, it is pushing lawmakers to raise the ownership cap to 25%—a level which, if applied, would give the automaker marginal breathing room to increase its Chinese ownership if desired.

An alternative currently under discussion would replace the fixed percentage entirely with a qualitative national security review, an approach people familiar with the talks say would likely favour Mercedes-Benz over a hard numerical line. The Senate Commerce Committee is due to take up the bill later in July after delaying an earlier hearing, and while momentum is building, its passage remains far from a sure bet.

The House Select Committee on China has already gone public with objections to the lobbying itself: a 16 July post on X stated that Mercedes-Benz “is actively lobbying the Senate in opposition.” It also characterised the automaker, in rather an inflammatory manner, as a “German-based, Chinese-owned company,” which should not be dictating US legislative terms. 

A parallel House bill, the Motor Vehicle Modernization Act, applies a similar 15% threshold and carries its own exemption structure, though sources have told CNBC its current wording could affect Mercedes-Benz regardless of its more moderate intentions.

Mercedes-Benz is pouring billions through the rest of the decade into its Alabama plant

Volvo Cars ostensibly faces far worse exposure, given it is 78% owned by Geely. However, the automaker also has a workaround: it secured explicit authorisation from the US Commerce Department, which confirmed Volvo’s governance and data practices pose no national security risk. The Senate bill includes a grandfathering provision protecting companies that already hold this kind of federal clearance. 

That leaves Mercedes-Benz relatively alone as it navigates a legislative fix while its more heavily Chinese-owned rival has effectively already cleared the bar through a different regulatory channel entirely. Another brand majority-owned by Geely, Polestar, was denied exemption by the US and will subsequently pull out of the market in 2027.

The stakes for Mercedes are significant given its scale in the US market: the company sold more than 315,000 passenger cars and vans last year and has invested in US manufacturing since the 1990s. This includes a further US$4bn pledged for its Alabama plant through 2030, the same year the Senate bill’s compliance deadline would take effect for companies already operating in the country.

The Alliance for Automotive Innovation, and industry lobbying group, has broadly endorsed the bill’s intent, warning that China’s ambitions to dominate global auto manufacturing pose “a clear and present danger” to US economic and national security. At the same time, it has cautioned that “details matter” in how the text is finally written. Mercedes’ fate in the US, then, appears to rest on whether lawmakers ultimately choose to measure the risk by percentage or control.