TUSCALOOSA, ALABAMA — 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 in the United States. The bill defines control by a foreign adversary as a 15% or greater stake held by a person or combination of foreign persons.

Mercedes-Benz Group AG faces potential exclusion under the legislation due to combined ownership stakes by Chinese entities that exceed the 15% threshold. The Beijing Automotive Industrial Corp., now known as BAIC, holds a 9.98% share in Mercedes-Benz and is owned by the Chinese government. Chinese billionaire Li Shufu, through his Tenaciou3 Prospect Investment firm, owns an additional 9.69% stake. Together, these holdings total 19.67% of the German automaker’s parent company.

The bill includes exemptions for automakers that have manufactured passenger vehicles in the U.S. for at least five years before January 1, 2026, but that exemption does not apply to companies with equity interests tied to foreign-adversary governments.

Mercedes-Benz operates two major assembly plants in the U.S., including its largest facility in Tuscaloosa, Alabama, which has produced more than 5 million vehicles since opening. The company employs over 10,000 people in the United States. A spokesman for Mercedes-Benz declined to comment on the legislation but said the automaker has two large assembly plants and employs more than 10,000 people in the U.S.

Daniel Kelly, press secretary for the House Energy and Commerce Committee, confirmed details of the bill but declined to comment on potential impacts for specific companies such as Mercedes-Benz. The legislation is sponsored by committee Chairman Brett Guthrie, R-Ky., and currently exists only in the House with no Senate counterpart.

“If Mercedes were to be included in the bill, I think it would be an unintended consequence that could result in the loss of jobs and profits,” said Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation. A former automotive policy advisor and lobbyist consulted on the bill said, “The language is unambiguous.”