Tesla announced on Sunday that it intends to build a new battery factory in the Chinese metropolis of Shanghai. The construction project is causing concern in the US House of Representatives. Mike Gallagher, Republican chairman of the House Select Committee on the Chinese Communist Party, told Reuters, “I’m concerned about that.” “Tesla appears to be totally dependent on the generosity of the US government in terms of tax breaks and access to the Chinese market,” Gallagher said. In an interview with the news agency, he described the type of business that Tesla has concluded in the People’s Republic as “very questionable”.
Gallagher wants to know how Tesla boss Elon Musk reconciles the US government’s support for the electric car maker and its activities in China. The Republican chairman of the special committee of the House of Representatives should also mean the waived tax advantages in the USA; the anti-inflation law introduced in mid-August provides, among other things, for subsidies for the construction of plants for electric cars and for battery production in the country.
While Musk didn’t respond to a Reuters request for comment, he wrote on Twitter that Tesla is ramping up production in Texas, California and Nevada. “Our competitors need subsidies, not us. But if competitors get subsidies, Tesla should get them, too,” the tech billionaire continued. A few hours earlier, Musk had confirmed the construction project for a new battery factory in China, the world’s most important car market, on Twitter: “Tesla opens Megapack factory in Shanghai to complement production at Megapack factory in California.” The annual capacity should therefore be 10,000 megapack units, which corresponds to energy storage of around 40 gigawatt hours.
From a US perspective, the expansion plans in China are not very encouraging. Relations with China are currently very tense. The US is striving to compete more effectively with China in the economic sphere. To this end, they want to convince US technology and entertainment companies such as Apple, Alphabet, Google and Disney to carry out their business activities in their home market instead of in the Far East. The economies of both countries are said to be “selectively decoupled”. From this point of view, Gallagher hopes to be able to hold talks with Tesla, for example. At the same time, he hinted that he could demand an explanation from company executives if his investigation into their ties with China was obstructed.
Meanwhile, the existing Gigafactory in Shanghai is running quite successfully for Tesla. What was once the US automaker’s first overseas factory accounted for more than half of the company’s global vehicle production last year. Their sales totaled a good $18 billion – more than a fifth of Tesla’s total sales.
Sources: Reuters, Twitter
