Tesla China deal alarms US Congressman

Elon Musk's electric vehicle company is opening a Megapack battery factory in Shanghai. Republican US congressman Mike Gallagher is "concerned" about Tesla's cozy relationship with China, describing the deals they've struck there as "very concerning". Musk responded to a Twitter user's negative comment about Tesla's China business, insisting that the government subsidies it receives are an industry-wide phenomenon and that if they were removed, Tesla's competitive position would improve. The new manufacturing facility will produce ten thousand Megapacks per year, for a total of 40 gigawatt hours of energy, according to Chinese state outlet Xinhua. Tesla's new Megapack factory is located close to its Shanghai vehicle-manufacturing plant, which recently announced an expansion that will allow it to produce 450,000 more cars per year.

Tesla hopes to take advantage of China's dominant position in the battery supply chain to lower the prices of its lithium-ion power units, with an eye towards expanding its battery and solar energy business to the same size as its electric car business. Tesla's Chinese sales accounted for more than a fifth of its revenue last year, while its Shanghai vehicle factory produced more than half the cars the company sold. Construction on the Shanghai facility will start in the third quarter of this year and production is expected to begin in the second quarter of 2024. Gallagher has vowed to "win the new Cold War" against China and has used his committee to attempt to convince the rest of the US of the wisdom of shutting out the economic superpower from certain strategic industries.