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New Delhi: The US Senate Commerce Committee approved legislation to toughen a U.S. government ban on Chinese automakers entering the American market. This could potentially ban Mercedes-Benz from selling vehicles in the United States at all. Senator Ted Cruz, the chair of the committee, warned that without changes, the bill’s provision that would ban brands with more than 15 per cent ownership of Chinese entities would bar the German brand from selling cars in the USA due to its almost 20 per cent Chinese investment.

Senator Bernie Moreno confirmed that Mercedes-Benz would have until 2030 to comply and could still get waivers if required. It is called the Connected Vehicle Security Act of 2026 and was passed unanimously, making way for consideration by the full Senate. The bipartisan legislation, brought by Ohio Republican Senator Moreno, is targeted at restricting vehicles and connected-car technologies linked to China and other countries considered security risks by the US.

Moreno noted that the proposed law would prohibit the import, sale and operation of vehicles made in China or other designated countries of concern. It would also restrict the use of connected-vehicle tech made in these countries, which includes software and data systems, on American roads.

The rules will cover several types of vehicle connectivity technology, including Bluetooth, Wi-Fi, cellular systems, and certain satellite communications. This comes amidst concerns that connected vehicles could potentially be used to collect sensitive data about American vehicle owners. 

The bill is also intended to formalise restrictions introduced during the Biden administration. They effectively stop Chinese carmakers from entering the US passenger-vehicle market. Senator Moreno said the legislation was necessary to protect the country’s industrial base and avoid further Chinese influence in the American automotive sector.

The bill has sparked some debate as well. Senator Ted Cruz, who chairs the committee, claimed that General Motors was supporting the restriction to push Mercedes-Benz out of the US market and cut down on Cadillac’s competition.

GM has rejected that suggestion, saying the legislation was not aimed at any particular automaker. The US brand further said that it supports measures designed to strengthen American manufacturing and the global competitiveness of US carmakers.

Moreno said GM is set to shift production of the China-built Buick Envision to the US for the 2028 model year. Ford too is expected to move production of certain China-built Lincoln models to America. He also claimed that Waymo is considering US-based automakers for future vehicle platforms instead of relying on Chinese-built platforms.

Mercedes-Benz, meanwhile, highlighted its significant presence in the US and said it supports legislation intended to protect national security. However, the automaker added that it wants any new rules to avoid disrupting its operations and said it remains committed to protecting its employees, dealers, suppliers and customers.

The proposed law could also affect other European-linked brands. Polestar has said it may be forced to stop selling vehicles in the US from the 2027 model year, while Volvo Cars has received permission to continue operating in the market but must still comply with the relevant requirements.

Last year rumours had gone around that Mercedes would borrow engines from BMW in anticipation of high tariffs in the USA. However, both brands rejected the claims.