WASHINGTON, April 10 (Reuters) – The chief of a U.S. congressional committee on China stated on Monday he was involved about electrical carmaker Tesla Inc's (TSLA.O) dependency on China, a day after the corporate revealed plans to open a Megapack battery manufacturing unit in Shanghai.
Tesla introduced the manufacturing unit in a tweet on Sunday, and Chinese language state media stated it might initially produce 10,000 Megapack items a 12 months, equal to round 40 gigawatt hours of vitality storage, and complement an enormous present Shanghai plant making electrical autos.
Mike Gallagher, the Republican chair of the Home of Representatives' choose committee on China's Communist Celebration, stated he wish to understand how Tesla's CEO Elon Musk balances U.S. authorities assist for Tesla and its operations in China.
“I am involved about this,” Gallagher informed Reuters when requested concerning the battery manufacturing unit.
“Tesla appears solely dependent, A, on the largesse of the federal authorities through tax breaks, and B, upon entry to the Chinese language market,” Gallagher stated.
“The type of offers they've struck there appear very regarding. I'd simply be curious to understand how Elon Musk balances each of these,” he stated, including that Musk's area flight enterprise SpaceX was in contrast a “huge success story.”
Tesla didn't instantly reply to a request for touch upon Gallagher's remarks.
Musk responded to criticism on Twitter on Sunday, saying in a tweet that “Tesla is rising manufacturing quickly in Texas, California & Nevada.”
The corporate's Shanghai manufacturing unit accounted for greater than half of the automaker's world manufacturing in 2022. Tesla generated $18.15 billion in income from China final 12 months, accounting for over one fifth of its whole income.
Tesla's plans to open the Megapack manufacturing unit come amid rising tensions between China and the U.S. and a push by Beijing to woo overseas corporations again after the nation's prolonged COVID-19 lockdowns battered its economic system.
‘THINK ABOUT SUBPOENAS'
Gallagher met final week in California with know-how and leisure corporations – together with Apple (AAPL.O), Alphabet Inc's (GOOGL.O) Google and Disney (DIS.N) – about their enterprise dealings in China.
His choose committee, which Republican Home Speaker Kevin McCarthy created in January, has sought to persuade People of the necessity to forcefully compete with China and to “selectively decouple” the U.S. and Chinese language economies in sure strategic industries.
Gallagher stated he hoped to have interaction with Tesla and different corporations going ahead, however steered he may require company executives to testify if his investigation into their ties to China have been stymied.
“If we attain roadblocks and we get to some extent the place legal professionals are getting concerned with solutions, that is while you begin to consider subpoenas,” he stated.
Three sources at giant U.S. corporations, from know-how to retail, informed Reuters they're anxious concerning the prospect of their executives being referred to as to testify about enterprise operations in China and face questions equivalent to whether or not their corporations use provides produced in China with pressured labor.
Gallagher stated he was conscious executives from a variety of companies is perhaps involved about testifying.
“It might be a significant asset supervisor on Wall Road. It might be a film star or a high-powered producer. It might be the CEO of a giant tech firm. In the event that they wish to do enterprise in China, there are specific questions no one needs to be requested,” he stated.
Gallagher declined to debate the matters of the committee's upcoming hearings, however stated he was on a “tight timeline.”
To this point the committee has held two hearings, one framing “existential” U.S.-China competitors, and the opposite on Chinese language authorities abuses towards Muslim minorities in its western Xinjiang area.
Reporting by Michael Martina, Patricia Zengerle. Further reporting by Hyunjoo Jin in San Francisco
Modifying by Don Durfee and Josie Kao
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