By Michael Elkins
Mike Gallagher, a Republican representative from Wisconsin and chair of the U.S. committee on China, voiced his concerns Monday evening about electric carmaker Tesla's (NASDAQ:TSLA) dependency on China.
The Chairperson said he would like to know how Tesla's CEO Elon Musk balances U.S. government support for Tesla and its operations in China. The statements came one day after the CEO announced in a tweet that Tesla plans to open a Megapack battery factory in Shanghai.
"I'm concerned about this," Gallagher told reporters 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 SpaceX was by contrast a "massive success story."
Musk was met with early criticism on Sunday but responded in a tweet saying that "Tesla is increasing production rapidly in Texas, California & Nevada."
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.
Gallagher met last week in California with technology and entertainment companies – including Apple (NASDAQ:AAPL), Alphabet's Google (NASDAQ:GOOGL), and Disney (NYSE:DIS) – about their business dealings in China.
His committee has sought to convince Americans of the need to forcefully compete with China and to "selectively decouple" the U.S. and Chinese economies in certain strategic industries.
So far the committee has held two hearings, one framing "existential" U.S.-China competition, and the other on Chinese government abuses toward Muslim minorities in its western Xinjiang region.
Shares of TSLA are up 2.37% in mid-day trading on Tuesday.