Mercedes-Benz CEO Ola Källenius has pledged to protect the company's U.S. operations from a possible sales ban triggered by its Chinese investors. The commitment comes as the U.S. Senate Commerce Committee approved legislation intended to toughen a ban on Chinese automakers entering the U.S. market. {claim:1, claim:2}
The proposed legislation stipulates that no more than 15% of a car company can be owned by a Chinese entity. Mercedes currently faces scrutiny because the Chinese carmaker BAIC Group and Geely founder Li Shufu together hold nearly 20% of Mercedes' listed shares. {claim:3, claim:18}
Källenius stated that the company is monitoring the U.S. debate closely and is deeply involved in talks with relevant parties. He noted that the company is not naive regarding the geopolitical environment and the competition between the United States and China. {claim:9, claim:11}
U.S. market performance and investments
The company maintains a main global SUV plant in Tuscaloosa, Alabama, and a battery plant in Woodstock, U.S. {claim:20} Mercedes has pledged over $7 billion in investments in its U.S. operations, which includes $4 billion through 2030 to increase SUV production at the Alabama plant. {claim:4}
Källenius indicated that depending on the outcome of a North American trade pact revamp currently under negotiation, the company could set up engine production in the U.S. {claim:5, claim:21}
Political response and industry debate
Republican Senator Ted Cruz of Texas opposed the bill, stating that the U.S. would never consider banning Mercedes from the U.S. {claim:15} He claimed that General Motors supported the measure to remove Mercedes from the U.S. in hopes that Cadillac could recapture market share. {claim:16} General Motors has denied that its advocacy of the bill is tied to any single competitor. {claim:17}
Republican Senator Bernie Moreno of Ohio stated that Mercedes will have until 2030 to comply with the new legislation. {claim:22, claim:23} Moreno added that Mercedes could get waivers from the ownership requirement if necessary. {claim:14}
While U.S. sales have increased, Mercedes' sales in China dropped by 30%. {claim:19} In the U.S., the combustion engine cars popular in the market earn Mercedes higher margins compared to more costly-to-produce electric vehicles. {claim:7}