By David Shepardson
WASHINGTON (Reuters) -The top Democrat on the House of Representatives Appropriations Committee said on Friday that Republicans in Congress were protecting Elon Musk's Chinese investments by scrapping provisions restricting U.S. investments.
Representative Rosa DeLauro said in a letter that Musk, CEO of electric car maker Tesla (NASDAQ:TSLA), may have upended the government funding process to remove a provision that would regulate U.S. investments in China given his "extensive investments in China in key sectors and his personal ties with Chinese Communist Party leadership, and calls into question the real reason for Musk’s opposition to the original funding deal."
Tesla did not immediately respond to a request for comment. Musk posted a number of critical posts about DeLauro on X on Friday including one that said she "needs to be expelled from Congress!"
President-elect Donald Trump has named Musk, a billionaire, as co-head of a project to cut government costs. Musk helped lead opposition online to a government funding bill that would have included the Chinese investment restrictions.
“Musk’s investments in China and his ties with the Chinese Community Party have only grown over the last few years with Tesla’s Shanghai plant producing about 50 percent of Tesla’s global automobile output," DeLauro wrote.
Nearly a quarter of Tesla’s global revenue in 2023 drew from sales of Chinese-made vehicles from the Shanghai factory, DeLauro said, adding that Tesla broke ground on a $200 million factory in China to manufacture large batteries critical to its electric vehicle supply chain.
She added that proponents of regulating U.S. investment in China "have advocated for the inclusion of large battery manufacturing in the list of technologies subject to outbound investment screening."
In October, the Treasury finalized rules effective Jan. 2 that will limit U.S. investments in artificial intelligence and other technology sectors in China that could threaten U.S. national security.
On the House floor, DeLauro vowed to continue fighting for the provisions. "This is something that simply must be done to safeguard our supply chains and our critical capabilities," she said adding Musk had "bullied Republicans into going back on their words."