Mercedes-Benz has been in the news recently amid reports that its vehicle sales in the U.S. could be banned in the future, as around 20% of the company is owned by Chinese entities.
There has been growing concern in the United States over data security risks associated with vehicles linked to Chinese automakers or investors.
Existing U.S. rules already restrict the sale of certain connected vehicles with Chinese software, while steep tariffs have made it largely impractical for Chinese automakers to sell vehicles in the country.
In response, Mercedes-Benz CEO Ola Källenius said the company is prepared to make any necessary adjustments to comply with U.S. law.
What Is the New Law About?
Guessing Headlights recently reported how the U.S. Senate Commerce Committee approved legislation that would prohibit automakers with 15% or more Chinese ownership from selling vehicles in the country.
Nearly 20% of the stake in Mercedes-Benz is owned by Chinese investors. Eric Li Shufu, the founder and chairman of Geely, holds a 9.69% stake through an investment firm, while the BAIC Group (Beijing Automotive Group) owns 9.98%.
Thus, Mercedes-Benz could be affected if the legislation passes, since its Chinese ownership exceeds the 15% threshold specified in the bill, unless the minimum requirement is changed. Senator Ted Cruz, the committee chair, said that the bill requires changes.
Cruz alleged that General Motors was pushing to remove Mercedes-Benz from the market so its own brand Cadillac can benefit from it. However, he mentioned that “we would never consider” banning Mercedes-Benz sales in the United States.
Senator Bernie Moreno, meanwhile, confirmed that Mercedes-Benz has time until 2030 to comply if the bill becomes law. However, it is unclear how the German automaker would ensure compliance.
Moreno, however, said Mercedes-Benz could receive waivers, allowing it to continue operating in the U.S. Notably, the conditions for receiving those waivers were not disclosed.
Källenius is Determined to Protect Mercedes-Benz in the U.S.
The U.S. remains a key market for Mercedes-Benz, and the CEO revealed that the company will do everything to ensure its presence remains protected. Källenius told Reuters:
“If we need to make adjustments to comply with anything, we will make sure that we protect our presence and our business in the U.S.
“We are not naive about the geopolitical environment and the competition between the United States and China.”
The CEO added that Mercedes-Benz is closely monitoring the discussions and is “deeply involved” in talks with relevant parties.
Mercedes has pledged over $7 billion in investments in its U.S. operations, including $4 billion through 2030 to increase SUV production at its Alabama plant.
Mercedes-Benz is considering producing engines in the U.S., with Källenius saying the decision will depend on the outcome of ongoing North American trade negotiations that could introduce stricter U.S.-content rules for vehicles.
Expanding its U.S. footprint makes strategic sense after Mercedes posted a 15% rise in U.S. sales during the first half of the year. Strong demand for combustion-engine models has also helped boost profits while offsetting weaker sales in China.