The Senate Committee on Commerce, Science and Transportation voted unanimously on Wednesday to advance bipartisan legislation that seeks to codify federal restrictions on Chinese-linked vehicle technology. While the bill aims to bolster national security by preventing the collection of sensitive data by connected cars, lawmakers warned that the current language could unintentionally bar German automaker Mercedes-Benz from the U.S. market.
Senate Committee Advances Legislation Targeting Chinese-Linked Auto Tech
The proposal, titled the Connected Vehicle Security Act, was introduced by Sens. Bernie Moreno, R-Ohio, and Elissa Slotkin, D-Mich. It is designed to formalize regulations intended to keep Chinese-linked technology out of the U.S. light-duty market. However, the bill includes a 15% ownership threshold regarding Chinese entities that has sparked significant debate during the committee’s markup process.
Concerns Over Ownership Thresholds
Sen. Ted Cruz, R-Texas, who serves as the committee chair, highlighted a critical conflict during Wednesday’s hearing. He noted that the bill’s 15% Chinese ownership threshold would likely disqualify Mercedes-Benz from selling vehicles in the United States. According to Cruz, two Chinese investors hold a combined stake of nearly 20% in the German automaker.
Specifically, the ownership structure includes the Chinese state-owned automaker BAIC, formerly the Beijing Automotive Industrial Corp., which holds a 9.98% stake, and Geely founder Li Shufu, who holds 9.69%. Cruz emphasized that despite the current draft of the bill, we would never consider
banning Mercedes-Benz sales in the United States, adding that the legislation requires modifications before it could become law.
Sen. Moreno suggested that under the proposed framework, Mercedes-Benz would have until 2030 to achieve compliance with the ownership requirements and could potentially seek waivers if necessary.
Industry Competition and Legislative Intent
The legislative push arrives amidst a broader effort to secure the U.S. industrial base. We’re preventing an absolute, total, and complete destruction of our industrial base,
Moreno stated regarding the bill’s objectives.
However, the committee hearing also brought to light allegations regarding the influence of major U.S. automakers on the bill’s specific provisions. Cruz claimed that General Motors is pushing for the ownership threshold to remove Mercedes-Benz from the market, potentially to enhance the competitiveness of its Cadillac brand. Furthermore, Cruz noted that another provision, which would require automakers to purchase batteries from GM, could increase vehicle costs by approximately $5,000.
A proposed amendment to revise battery management software requirements—a move reportedly sought by Rivian—failed during the committee vote. Both General Motors and Mercedes-Benz did not immediately respond to requests for comment regarding these claims.
Broader Context of Connected Vehicle Restrictions
The legislation builds upon existing concerns regarding national security, specifically the ability of connected vehicles to harvest data through Bluetooth, Wi-Fi, cellular, and satellite communication technologies.
The regulatory landscape has already impacted other international manufacturers. Polestar, which is majority-owned by China’s Geely Holding, announced last month that it was forced to cease U.S. sales beginning in the 2027 model year due to Trump administration requirements. Meanwhile, Volvo Cars, a sister brand to Polestar, reported in May that it had received authorization to continue operations, provided it meets the specified rules across its U.S. lineup.
As the Connected Vehicle Security Act moves to the full Senate floor, the outcome remains uncertain. The divisions revealed during the committee’s deliberations underscore the complexity of balancing national security interests with the realities of global automotive ownership and supply chains.
