Mercedes-Benz Escapes US Ban Threat as Senate Bill Stalls on Rand Paul Objection

Senate bill targeting carmakers with over 15% Chinese ownership is pulled from fast-track schedule; sponsor says Mercedes-Benz will be carved out.

Mercedes-Benz has won a double reprieve in Washington: the Senate bill that would have barred carmakers with substantial Chinese ownership from selling connected vehicles in the US has been pulled from this week's fast-track schedule, and the legislation's own sponsor now says the Stuttgart manufacturer will be explicitly carved out of the restrictions.

The procedural roadblock came from Senator Rand Paul, who blocked the accelerated passage of S. 4429. The delay pushes the measure past November's midterm elections and into the post-election session, handing Mercedes-Benz a temporary breather in one of its most profitable markets. Paul's objection was pointed: he argued the initiative unfairly penalizes European manufacturers such as Mercedes-Benz.

Ownership threshold put the company in the crosshairs

Approved by the Senate Commerce Committee in July, the bill drafted by Senators Bernie Moreno and Elissa Slotkin targets companies with more than 15 percent Chinese ownership, prohibiting them from selling connected vehicles on US soil. It also bans hardware and software tied to countries including China and Russia.

On paper, Mercedes-Benz sits above that line. Chinese investors collectively hold close to 20 percent of the Stuttgart group: BAIC Group controls 9.98 percent, while Tenaciou3 Prospect Investment Limited accounts for 9.69 percent.

Moreno, the bill's sponsor, confirmed to CNBC on Tuesday that Mercedes-Benz will not be caught by the planned sanctions, though negotiations over the final wording are still ongoing. He had previously stressed that the legislation is not designed to push Mercedes-Benz off the US market and that a finished version should still allow the company to sell its vehicles. Whether that requires textual adjustments or a change to the carmaker's ownership structure remains unresolved.

Political headwinds and an existing tariff wall

Backers of the bill point to security risks, warning that sensitive vehicle data could flow to Beijing. A companion measure in the House of Representatives already counts more than 100 supporters. Washington has also erected broad administrative barriers against Chinese passenger cars, alongside tariffs exceeding 100 percent on electric vehicles from China.

While Moreno and Slotkin are pushing for passage before year-end, the talks now shift to the legislative period after the congressional elections. President Donald Trump signalled openness in January and September to letting Chinese manufacturers build plants in the US provided they create local jobs, whereas Commerce Secretary Howard Lutnick rejected joint ventures with Chinese EV makers in April.

Cost-cutting talks at home add pressure

The political maneuvering in Washington lands during a strained stretch for the automaker. Management is negotiating cost reductions in Germany with the works council, with plans to raise the weekly working time to 38 hours and trim special payments. A voluntary severance programme for employees at the German sites is expected to launch in December.

Production chief Michael Schiebe recently warned that up to two plants could close if the savings fail to materialize. On the office side, a new attendance rule is taking shape under which four days in the office will become the standard for full-time staff from 2027.

Analysts trim targets as BlackRock nudges higher

Deutsche Bank Research lowered its price target for the stock on Tuesday to 70 euros from 73 euros, while keeping its buy rating. Analyst Tim Rokossa noted that the upcoming reporting period is unlikely to shift the prevailing sector narrative.

In the shareholder base, BlackRock, the world's largest asset manager, slightly increased its total voting rights position to 6.02 percent, according to mandatory disclosures.

The shares closed yesterday at 40.53 euros, leaving the stock down 33 percent since the start of the year. Market participants will get a clearer read on the summer quarter in a few weeks, when Mercedes-Benz publishes its interim report for the third quarter of 2026 on 28 October 2026 and hosts a conference call for analysts — the first hard look at how the savings measures and market conditions are feeding through to the financials.