Tesla is building a new mega factory in China – the US is not amused

Tesla announced a battery factory in Shanghai on Sunday. From 2024, the production facility should supplement the production of so-called “megapack” batteries in California. Tesla’s main e-car factory is already at the same site in China. Elon Musk’s plans to produce more in the Middle Kingdom in the future are now calling American politicians to action. They expressed their concern to Reuters news agency about Tesla’s activities in China.

“Tesla appears to be completely dependent on the generosity of the US government in the form of tax breaks and access to the Chinese market,” Mike Gallagher, the Republican chairman of the House of Representatives Special Committee on the Chinese Communist Party, said Monday. . . Gallagher called Tesla’s expansion plans in China “highly questionable”. Tesla did not immediately respond to a request for comment.

Tesla’s largest Chinese company

Tesla generated $18.15 billion in China by 2022, accounting for more than a fifth of its total revenue. Tesla currently makes money selling electric cars, but Musk says the battery business will play an equally important role in the future. Chinese companies are considered leaders in the production of high-performance batteries for e-cars and China dominates large parts of the battery industry.

Tesla critics speculate that Musk wants to appease the Beijing regime with the expansion plans in China so as not to jeopardize Tesla’s special position in China.

US politicians are concerned that Tesla is expanding battery production, which is important for the mobility transition, in China and not in the US. The US massively subsidizes battery manufacturers so that they set up their new battery factories in the US and not in China or Europe. The EU is also luring manufacturers with subsidies to set up a domestic battery industry.

The Chinese activities of Apple and Google under the magnifying glass

Gallagher also met with American companies such as Apple, Alphabet (Google) and Disney last week to discuss their business relationships with China. He indicated that if his investigations were unsatisfactory, the executives should trot in person.

The increasing pressure from American politics does not seem to leave tech companies indifferent. Companies are concerned they will get uncomfortable questions about forced labor products, Reuters reported.

In recent years, there have been repeated reports of forced labor and re-education camps being used to suppress the Uyghur Muslim minority in China’s Xinjiang province. Yet Western companies remain in China for economic reasons. For example, Tesla opened a showroom in the Uyghur province in early 2022. Human rights activists therefore accused the company of supporting genocide.

(oli)