Mercedes-Benz may be shut out of U.S. market under congressional bill

Mercedes-Benz could find itself shut out of the U.S. auto market — banned from making or selling new vehicles in the country — under legislation making its way through Congress.

New bipartisan legislation aimed at limiting Chinese involvement in the U.S. auto market may sweep in Mercedes-Benz unless the bill is changed or the German automaker’s largest shareholder sells its stake.

The bill, the Motor Vehicle Modernization Act of 2026, would prohibit automakers that have “any direct or indirect equity interest by a foreign-adversary government,” such as China, from importing, selling or manufacturing vehicles for sale in the U.S.

Mercedes-Benz’s largest individual shareholder is the state-owned Chinese automaker BAIC, formerly the Beijing Automotive Industrial Corp., with a 9.98% share. The potential implications of the legislation on the automaker are previously unreported.

Several people familiar with the legislation who spoke to CNBC cited gray areas in the bill that, depending on how they’re interpreted, could ban Mercedes-Benz from operating in the U.S.

Two sources who agreed to speak on the condition of anonymity for fear of repercussions or because they weren’t authorized to speak publicly said they believe the bill, as it’s currently written, would ban the company.

“The language is unambiguous,” said a former automotive policy advisor and lobbyist who was consulted about the bill.

Daniel Kelly, press secretary for the Energy and Commerce Committee, confirmed the details of the legislation. He declined to comment directly on potential impacts for individual companies, including Mercedes-Benz.

A spokesman for Mercedes-Benz declined to comment on the legislation but told CNBC on Friday the automaker has two large assembly plants and employs more than 10,000 people in the U.S.

The bill comes as lawmakers in both parties seek to prevent Chinese automakers from gaining a foothold in the U.S. market, even as Chinese ownership already runs through parts of the global auto industry.

The bill, which is sponsored by House Energy and Commerce Committee Chairman Brett Guthrie, R-Ky., is currently a House-only initiative with no Senate companion. It includes exemptions for China-backed companies, but not if they’re directly or indirectly owned by the Chinese government.

Automakers that have manufactured passenger vehicles in the U.S. for at least five years before Jan. 1, 2026, could qualify for an exemption. But the bill says that exemption does not apply to companies with “any direct or indirect equity interest by a foreign-adversary government.”

China is listed as a foreign adversary along with Russia and North Korea.

The bill aims to ban companies with such ownership from manufacturing, selling or importing vehicles in the U.S. for…