Could Mercedes Face a U.S. Ban? New Bill Targets Automakers With Chinese Ties

Polestar might not be the only automaker facing a ban in the U.S. due to Chinese ties. A Reuters report states that the U.S. Senate Commerce Committee approved legislation this week that could also put Mercedes-Benz at risk due to the nearly 20 percent passive stake in the automaker that is owned separately by China’s BAIC Group and Chinese billionaire and Geely founder Li Shufu. Although Polestar was impacted by the U.S. Department of Commerce’s Bureau of Industry and Security under the Connected Vehicle Rule (CVR), this new bill would outright ban any manufacturer with Chinese ownership of 15 percent or more.

A Bipartisan Bill That Will Have Huge Consequences for Some OEMs

At this point, the legislation is merely a proposed bill and will not take effect unless it passes Congress and is signed by President Donald Trump. However, the Connected Vehicle Security Act (CVSA) has bipartisan support, as Ohio Republican Sen. Bernie Moreno and Michigan Democratic Sen. Elissa Slotkin both proposed the legislation sent to the Commerce Committee.

In a statement on the CVSA, Texas Republican Sen. Ted Cruz stated that the bill’s provision would ban companies with more than 15 percent ownership by “Chinese entities.”

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Although this would directly impact Mercedes, it would also effectively ban Lotus Cars and Volvo even after it has been given an exemption from the CVR that banned its sister brand, Polestar. Now, Volvo and Lotus could face further risk of a ban if the CVSA becomes law given their ownership by China’s Geely. Sen. Cruz also admitted that the bill still requires changes before it could become law and said General Motors (GM), parent company of Cadillac, was pushing this provision to get Mercedes out of the U.S. market.

Cruz also stated that Congress “would never consider” banning Mercedes sales in the United States, so a blanket ban on the German automaker appears unlikely. Sen. Moreno also stated that there could be waivers to get around the ownership rule, but also said the bill is aimed at “preventing an absolute, total, and complete destruction of our industrial base.”

We reached out to Mercedes for comment, and a spokesperson provided the following: “As we have shared with Congress, Mercedes-Benz is a long-standing key contributor to the U.S. economy with a broad and diversified shareholder base. No shareholder holds more than 10 percent of our stock, and our major shareholders are not directly represented on the Supervisory Board or have any control or decision-making authority when it comes to the company and its operations. Those decisions are made solely by the Board of Management of Mercedes-Benz.”

The spokesperson also pointed out that Mercedes is committed to supporting legislation designed to protect U.S. national security, but it also wants to ensure that any such legislation doesn’t impact its operations here.

Battery Management Rules Vote Shows EV Confusion in Washington

The discussion around the bill’s amendments also showed there is still a lot of confusion in Washington about how electrified vehicles are built and how battery components are sourced.

During the portion of the bill’s discussion on rules banning Chinese Battery Management Systems (BMS), introduced by Illinois Democratic Sen. Tammy Duckworth and based on existing Biden-era rules, Sen. Cruz stated that GM supported a provision related to it and batteries in the bill. He also stated that it would have required automakers to buy batteries from General Motors and would have added up to $5,000 to the cost of electrified vehicles without addressing the national security risks the bill was trying to solve.

However, Sen. Moreno stated that he didn’t understand why GM was brought up by Sen. Cruz, in addition to mentioning that Rivian is getting its batteries assembled in China. Confusingly, Moreno also stated that Tesla made more of its vehicles in the U.S., despite not admitting that the Model Y base and Model Y L are assembled in China using Chinese-manufactured battery packs for import into Canada, for example. The 2027 Model Y L is scheduled to begin manufacturing at Giga Texas later this year.

His statement also made it seem like, although we’re sure he wasn’t trying to imply it, Rivian is not an American company in his opposition to the amendment, rather than simply stating that Rivian was sourcing battery cells and using its own American-made BMS. Ultimately, Sen. Duckworth’s amendment failed to pass, but it does show that there is still a lot of confusion in Washington about how electrified vehicles and battery components work, along with the assembly processes and sourcing behind those vehicles.

GM and Rivian Respond

We asked GM for comment on Sen. Cruz’s statements, and a spokesperson provided the following: “General Motors supports policies that protect and strengthen American manufacturing and the global competitiveness of U.S. automakers, and we remain committed to long-term investments in our domestic workforce, facilities, and technology. As we have said many times, we can compete with anyone in the world when we are given a level playing field.”

We also reached out to Rivian for a statement on Sen. Moreno’s comments, and its spokesperson said the following: “Rivian is proud to be an American automaker, employing thousands of hardworking people at our manufacturing facility in Normal, Illinois, and across the country. Our vehicles are designed, engineered, and assembled in the United States and prioritize performance, capability and safety while also protecting the privacy of those who drive them. While all automakers rely on complex supply chains that include both U.S. and international components, we are dedicated to promoting an American manufacturing base that is robust, competitive, and an example to the rest of the world.”