The U.S. Senate is moving to tighten regulations on the entry of Chinese automotive companies into the American market.
On July 22, the Senate Commerce Committee passed the "2026 Connected Vehicle Security Act," co-sponsored by Republican Senator Bernie Moreno of Ohio and Democratic Senator Elissa Slotkin of Michigan, according to Reuters and other sources.
The bill prohibits the import, manufacture, and sale of connected vehicles and related software and hardware linked to adversarial nations, including China, Russia, Iran, and North Korea. Specifically, it bans the sale of vehicles produced by companies where entities from adversarial nations hold more than 15% of shares, voting rights, or board seats.
If enacted, companies with significant Chinese investment, such as Polestar, an electric vehicle manufacturer owned by Geely Automobile Group, are expected to be the first affected. Polestar may face sales restrictions in the U.S. starting with its 2027 model year.
Volvo, which is majority-owned by Geely, has reportedly been granted permission to continue operations in the U.S. but must demonstrate that all its models comply with the new regulations.
Concerns have also been raised that Mercedes-Benz, which has about 20% of its shares held by Chinese investors, could fall under these regulations. Although the Chinese investment is largely passive and unrelated to management control, applying the bill's ownership criteria could lead to a ban on vehicle sales in the U.S.
Senator Ted Cruz, a Republican from Texas, warned that if the bill is implemented without amendments, it could result in the unexpected outcome of Mercedes-Benz being forced out of the U.S. market.
In response, Senator Moreno explained that Mercedes-Benz would be granted a grace period until 2030 to comply with the regulations and could seek exemptions if necessary.
* This article has been translated by AI.
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