Mercedes-Benz Wins Senate Reprieve as Buyback Window and Cost Cuts Take Shape

Senator Moreno says a bill barring automakers with over 15% Chinese ownership is not aimed at Mercedes-Benz, easing a key US sales threat.

Mercedes-Benz has secured a critical political lifeline in Washington, where the sponsor of a bill targeting automakers with substantial Chinese ownership has confirmed the Stuttgart manufacturer will not be swept up in the proposed restrictions. The reassurance arrived Tuesday from Senator Bernie Moreno, who told CNBC that the legislation is not intended to shut Mercedes-Benz out of the US market — a market that ranks among its most profitable.

The bill, as drafted, would bar manufacturers with Chinese ownership stakes exceeding 15 percent from selling new vehicles in the United States. Chinese investors currently hold a passive stake of just under 20 percent in the Dax-listed group, according to Reuters, placing Mercedes-Benz nominally above the threshold. Moreno's intervention, first reported by Reuters, eases the most immediate threat, though talks over the final shape of the legislation remain ongoing and the structural legal uncertainty for shareholders is far from fully resolved.

A Shareholder Base Caught Between Two Capitals

At the heart of the dilemma sits a single figure: that roughly 20 percent Chinese holding. For CEO Ola Källenius and his management team, the ownership structure amounts to a balancing act between two political blocs. Beijing is not merely a major shareholder but an indispensable sales region and cooperation partner. On September 22, Chinese Trade Minister Wang Wentao underscored that position after a video call with Källenius, saying Peking welcomed further investment from European manufacturers and wanted to deepen innovation partnerships with companies such as Mercedes-Benz.

Washington, meanwhile, is pressing for a clear distancing — or at minimum a formal carve-out — for the German group. Investors must now weigh whether the carmaker can politically safeguard its shareholder base without damaging its strategic foothold in China. Until the US bill is either amended or passed, the stake hangs over the company's valuation multiples like a sword of Damocles.

Cost Discipline at Home, Technology Bets Abroad

While the political front commands attention, Mercedes-Benz is pressing ahead with its internal restructuring. To support its savings drive, the company is relaunching a voluntary severance program for employees in Germany, expected to begin in December. A new in-office requirement is also taking shape, with four days per week set to become the standard for full-time staff starting in 2027.

The stakes on the cost side are considerable. Production chief Michael Schiebe has warned workers that without reductions, one German assembly plant and one powertrain facility could face closure. The company is targeting a reduction of 800 million euros in home-market labor costs to restore international competitiveness. Should failed collective bargaining talks and domestic restructuring charges collide with regulatory barriers overseas, profitability could come under sustained pressure.

On the technology front, Mercedes-Benz agreed on September 22 with software firm Wayve to integrate its autonomous driving system into future vehicles, with a launch planned within the next two years, according to Reuters. A resolution of the US tariff and legislative front, combined with those savings, could meaningfully stabilize the operating margin over the medium term.

Analysts Trim Targets as the Stock Hovers Near Lows

The market's mood remains cautious. The shares closed Tuesday at 40.53 euros, having traded at 40.22 euros at one point, dangerously close to the 52-week low of 40.12 euros. Since the start of the year, the stock has fallen 33 percent.

At Deutsche Bank Research, analyst Tim Rokossa cut his price target to 70 euros from 73 on Tuesday while keeping a buy rating, noting that the upcoming reporting period is unlikely to shift the prevailing sector narrative. In the shareholder register, BlackRock, the world's largest asset manager, nudged its total voting rights position slightly higher to 6.02 percent, according to mandatory disclosures.

What Investors Are Watching Next

The bull case rests on the ongoing talks in Washington producing an explicit exemption. If Chinese shareholders can be legally classified as purely passive investors within the draft, an existential burden on North American sales would vanish at a stroke, opening the door to a fundamental re-rating after the recent losses. The bear case is that the political signals from Congress prove non-binding: should the 15 percent threshold pass without a legally secure loophole for passive holders, Mercedes-Benz would face a stark choice between actively reducing the Chinese stake — risking significant friction with Beijing — or accepting sweeping restrictions on US vehicle sales.

For now, the corridor around recent lows sets the benchmark. As long as support near the 52-week low holds and negotiations in Washington move toward legal clarity, the risk-reward profile argues for cushioning the downside. The next decisive catalyst is the legislative path of the US package itself: only a written exemption for Mercedes-Benz will relieve investors of fears about painful sales declines in the US business. Clarity on the actual third-quarter performance will come on October 28, 2026, when the company reports and hosts its analyst call.