The U.S. is one step closer to tightening restrictions on Chinese-linked automakers after the Senate Commerce Committee approved a bill that would bar companies with at least 15% Chinese ownership from selling vehicles in the country. This could prevent Mercedes-Benz from selling vehicles in the U.S. in the future.
Reuters reported that the proposed legislation could prevent certain automakers with significant Chinese ownership from selling vehicles in the U.S. Senator Ted Cruz, who chairs the committee, warned that unless the bill is changed, Mercedes-Benz could be banned from selling vehicles in the U.S. because nearly 20% of the company is owned by Chinese investors.
Senator Bernie Moreno said that Mercedes-Benz has until 2030 to comply and could also receive waivers if necessary. Mercedes-Benz says that China’s BAIC Group currently holds 9.98% of the company’s voting rights, making it Mercedes-Benz Group AG’s largest individual shareholder.
In addition, Chinese billionaire Li Shufu (who also owns Geely) holds an equity interest of 9.69% in Mercedes-Benz Group through Tenaciou3 Prospect Investment Limited. It is unclear how Mercedes-Benz would comply with the proposed legislation if it becomes law.
Mercedes-Benz signage under clear blue sky Polestar Faces Similar Fate After Being Forced Out of the U.S.
Swedish automaker Polestar was recently banned from selling its cars in the U.S. by the Commerce Department due to new connected-vehicle security rules.
According to a report by Motor1, the rules prohibit connected vehicles with Chinese software from being sold in the U.S. beginning with the 2027 model year. Polestar is majority-owned by China’s Zhejiang Geely Holding Group. U.S. officials stated that connected car systems, including GPS and cameras, could pose national security risks.
Volvo, another Swedish brand that is majority-owned by Geely, was also under scrutiny. However, it received approval to continue its operations after revealing how it manages vehicle data and cybersecurity. For Polestar, though, a special authorization was denied.
According to the Wall Street Journal, Polestar won’t challenge the Commerce Department’s decision. Ending its journey in one of the world’s largest auto markets, the brand will shift its focus to other markets such as Europe. Polestar spokesman Michael Ofiara told the WSJ:
“We will instead focus our investments on markets where we have a strong brand position and ability to achieve profitable growth, with a strong weighting towards Europe.”