Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk has been accused of Rosa DeLauro of pressuring Republicans to abandon key US-China investment restrictions to safeguard the EV giant’s business interests in China.
What happened: In a letter on Friday, DeLauro, the top Democrat on the House Appropriations Committee, said Musk used his influence to get Republicans to drop provisions aimed at regulating U.S. investments in China, Reuters reported.
She pointed to Musk’s “extensive investments in China in key sectors” and alleged ties to the leadership of the Chinese Communist Party, or CCP.
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The controversy centers on Tesla’s gigafactory in Shanghai, which produces about 50% of Tesla’s global car output.
DeLauro argued that Musk’s actions jeopardized crucial legislation to protect U.S. supply chains and national security, accusing him of “bullying Republicans into going back on their words.”
Musk, in turn, criticized DeLauro Xearlier Tweetcalling for her expulsion from Congress.
Why it’s important: Tesla has seen robust sales in China, supported by strong demand for it Model Y And Model 3 vehicles. In November, Tesla’s retail sales in China reached 73,490 units, showing a significant recovery from previous challenges in 2024.
The EV giant also faces stiff competition from local players BYD Co.that leads the market, but Tesla’s steady increase in weekly insurance registrations (21,900 units in early December) signals growing momentum.
Tesla reported third-quarter revenue of $25.18 billion, representing 8% year-over-year growth. Although the company missed Wall Street’s estimates, auto revenues were $20 billion, up 2% year over year.
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DeLauro’s accusations highlight broader concerns about the risks of U.S. investment in Chinese technology sectors. The October rules finalized by the Treasury Department aim to limit such investments in critical areas such as artificial intelligence to protect national security.
