Mercedes pushes to raise Senate bill's China ownership cap | Automotive World
A threshold meant to block state-directed Chinese control doesn't yet distinguish that from Mercedes' passive shareholders. Stewart BurnettMercedes-Benz is lobbying to loosen a bipartisan Senate bill that. . .
A threshold meant to block state-directed Chinese control doesn't yet distinguish that from Mercedes' passive shareholders. Stewart BurnettMercedes-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 a15% capon 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 holds just under 10%, while Geely Chairman Li Shufu holds a similar amount through his investment vehicle. Mercedes-Benz has stressed that neither shareholder 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 cap which, if applied, would give the automaker breathing room to marginally increase its Chinese ownership if required. 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 its objections to the lobbying itself, posting on 16 July that Mercedes-Benz “is actively lobbying the Senate in opposition”. The statement 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 toldCNBCits 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 plantVolvo Cars faces arguably far worse exposure in terms of pure Chinese ownership, given it is 78% owned by Geely. However, the automaker also has a workaround: itsecuredexplicit authorisation from the Commerce Department confirming its governance and data practices pose no national security risk, and 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 majority-Geely-owned brand, Polestar, was denied exemption by the US, and will subsequentlypull outof 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 domestically last year and has invested in US manufacturing since the 1990s. This includes a further US$4bnpledgedfor its Alabama plant through 2030, the same year the Senate bill’s compliance deadline would take effect for companies already operating in the country. Industry lobbying group the Alliance for Automotive Innovation 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 it is finally written. The company’s fate in the US, then, appears to rest on whether lawmakers ultimately choose to measure the risk by percentage or by control.