| Translate This News In |
|---|
A day after Tesla Inc. announced plans to construct a Megapack battery facility in Shanghai, the chairman of a U.S. congressional committee on China expressed alarm about the dependence of the electric vehicle manufacturer on China on Monday.
Tesla revealed the facility in a tweet on Sunday, and Chinese state media said that it will initially create 10,000 Megapack units annually, or roughly 40 gigawatt hours of energy storage, and would be a complement to a sizable existing electric vehicle manufacturing facility in Shanghai.
The Republican head of the House of Representatives’ special committee on China’s Communist Party, Mike Gallagher, stated that he was curious to learn how Tesla CEO Elon Musk manages the conflict between U.S. government funding for Tesla and its operations in China.
When questioned by Reuters about the battery factory, Gallagher said, “I’m concerned about this.
According to Gallagher, Tesla appears to be completely reliant on two things: A, tax incentives provided by the federal government, and B, market access in China.
The deals that have been made there raise serious concerns. I’m simply interested in how Elon Musk manages to strike a balance between all of those,” he continued, noting that SpaceX, Musk’s space flight company, was in contrast, a “huge success story.”
A request for comment to Gallagher’s statements was not immediately met by Tesla.
Tesla is swiftly growing production in Texas, California, and Nevada, according to Musk’s response to criticism on Twitter on Sunday.
More than half of the automaker’s global production in 2022 was produced in its Shanghai factory. Over one fifth of Tesla’s overall revenue ($18.15 billion) came from China in the previous year.
Tesla’s intentions to launch the Megapack factory coincide with escalating tensions between the U.S. and China as well as Beijing’s efforts to win back international businesses after the country’s prolonged COVID-19 lockdowns severely damaged its economy.
“THINK OF SUBPOENAS”
Technology and entertainment corporations, including Apple, Google, and Disney, met with Gallagher last week in California to discuss their business ties in China.
The Republican House Speaker Kevin McCarthy established his select committee in January with the goal of persuading Americans that they must actively compete with China and “selectively decouple” their economies in a number of key strategic industries.
In the future, Gallagher said he planned to interact with Tesla and other businesses, but he also made the threat that, if his inquiry into those businesses’ ties to China were thwarted, he may call corporate executives to testify.
“You start to think about subpoenas if we hit snags and get to a point where lawyers are getting involved with answers,” he said.
Three sources at significant U.S. corporations, ranging from technology to retail, told Reuters that they are concerned about the possibility that their CEOs may be asked to testify about business operations in China and answer questions like whether their companies use goods made in China using forced labour.
Gallagher stated that he understood company executives from various industries could be reluctant to testify.
It might be a significant asset manager on Wall Street. It might be a famous actor or a successful producer. It might be a prominent tech company’s CEO. There are some questions nobody wants to be asked if they want to conduct business in China,” he remarked.
Despite saying he was on a “tight timeline,” Gallagher declined to comment on the subjects of the committee’s upcoming hearings.
Two hearings have been held by the committee thus far, one on the “existential” rivalry between the United States and China and the other on the treatment of Muslim minorities by the Chinese authorities in western Xinjiang.
