Mercedes-Benz could be banned from making or selling new vehicles in the United States under a new House bill aimed at blocking Chinese-linked automakers from the U.S. market [1]. The legislation, known as the Motor Vehicle Modernization Act of 2026, would prohibit automakers with any direct or indirect equity interest by a foreign-adversary government, including China, from importing, selling, or manufacturing vehicles for sale in the U.S. [1]. Mercedes-Benz's largest individual shareholder is BAIC, a Chinese state-owned automaker, which holds a 9.98% share in the company [1].
Sources familiar with the legislation indicated that the exemptions outlined in the bill would not apply to Mercedes-Benz, despite its significant manufacturing presence in the U.S. [1]. The bill includes exemptions for China-backed companies, but specifically excludes those directly or indirectly owned by the Chinese government [1]. Automakers that have manufactured passenger vehicles in the U.S. for at least five years before January 1, 2026, could qualify for an exemption, but this does not apply to companies with any foreign-adversary government ownership [1].
The bill is currently a House-only initiative, sponsored by House Energy and Commerce Committee Chairman Brett Guthrie, R-Ky., and does not yet have a Senate companion [1]. Lawmakers from both parties are supporting the measure as part of broader efforts to prevent Chinese automakers from gaining a foothold in the U.S. market, even as Chinese ownership is already present in parts of the global auto industry [1].
Several sources, including a former automotive policy advisor and lobbyist, stated that the language of the bill is unambiguous and, as currently written, would ban Mercedes-Benz from operating in the U.S. unless the bill is changed or BAIC sells its stake [1]. The potential implications for Mercedes-Benz are significant and were previously unreported [1].
CONCLUSION
The Motor Vehicle Modernization Act of 2026 poses a significant threat to Mercedes-Benz's ability to operate in the U.S. market due to its Chinese state-owned shareholder. Unless the bill is amended or BAIC divests its stake, Mercedes-Benz could be banned from manufacturing, selling, or importing vehicles in the U.S., marking a major development in U.S. efforts to limit Chinese influence in the auto industry.