The leader of a US congressional committee on China on Monday said he was concerned about electric automaker Tesla Inc’s dependency on China, a day after the company revealed plans to open a Megapack battery factory in Shanghai.
Tesla on Sunday announced the factory in a Twitter post, and Chinese state media said it would initially produce 10,000 Megapack units a year, equal to about 40 gigawatt hours of energy storage, and complement a huge existing Shanghai plant making electric vehicles.
US Representative Mike Gallagher, chairman of the US House Select Committee on Strategic Competition Between the US and the Chinese Communist Party, said he would like to know how Tesla CEO Elon Musk balances US government support for the company and its operations in China.
Photo: Reuters
“I’m concerned about this,” Gallagher said when asked about the battery factory.
“Tesla seems entirely dependent, A, on the largesse of the federal government via tax breaks, and B, upon access to the Chinese market,” Gallagher said.
“The sort of deals they’ve struck there seem very concerning. I’d just be curious to know how Elon Musk balances both of those,” he said, adding that Musk’s space flight venture, Space Exploration Technologies Corp, was by contrast a “massive success story.”
Tesla did not immediately respond to a request for comment on Gallagher’s remarks.
Musk on Sunday responded to criticism on Twitter, writing in a post that “Tesla is increasing production rapidly in Texas, California & Nevada.”
The company’s Shanghai factory accounted for more than half of the automaker’s global production last year. Tesla generated US$18.15 billion in revenue from China last year, accounting for more than one-fifth of its total revenue.
Tesla’s plans to open the Megapack factory come amid growing tensions between China and the US and a push by Beijing to woo foreign firms back after the country’s extended COVID-19 lockdowns battered its economy.
Gallagher last week met in California with technology and entertainment companies — including Apple Inc, Alphabet Inc’s Google and Walt Disney Co — about their business dealings in China.
His select committee, which US House of Representatives Speaker Kevin McCarthy created in January, has sought to convince Americans of the need to forcefully compete with China and to “selectively decouple” the US and Chinese economies in certain strategic industries.
Gallagher said he hoped to engage with Tesla and other companies going forward, but suggested he could require corporate executives to testify if his investigation into their ties to China were stymied.
“If we reach roadblocks and we get to a point where lawyers are getting involved with answers, that’s when you start to think about subpoenas,” he said.
Three sources at large US companies, from technology to retail, said that they are anxious about the prospect of their executives being called to testify about business operations in China and face questions such as whether their companies use supplies produced in China with forced labor.
Gallagher said he was aware executives from a range of businesses might be concerned about testifying.
“It could be a major asset manager on Wall Street. It could be a movie star or a high-powered producer. It could be the CEO of a big tech company. If they want to do business in China, there are certain questions nobody wants to be asked,” he said.
Gallagher declined to discuss the topics of the committee’s upcoming hearings, but said he was on a “tight timeline.”
So far the committee has held two hearings, one framing “existential” US-China competition, and the other on Chinese government abuses toward Uighurs in Xinjiang.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS