Why is Tesla being quizzed on its supply chain strategy?

21 January 2022

US politicians have written to Tesla CEO Elon Musk demanding answers on the company's supply chain in China.

Bill Pascrell Jr and Earl Blumenauer, respective chairs of House of Representatives subcommittees on Oversight and Trade, want to know if Tesla sources any goods made in the controversial Xinjiang region, whether it has any financial relations with companies there, and whether it financially benefits from “rampant” forced labour.

Pascrell and Blumenauer acted after Tesla announced it was opening a showroom in Xinjiang, which has faced long-standing criticisms of human right rights abuses against its Uyghur muslim popultaion, including forced labour and genocide. 

In a strongly worded letter, Pascrell and Blumenauer expressed their “dismay” at the company’s “misguided” decision.

“American business cannot further empower the gross human rights violations of the Chinese Communist Party (CCP),” they said. 

“As the CCP commits genocide against the Uyghur peoples and ramps up its hostility towards America and our allies, your misguided expansion into the Xinjiang Uyghur Autonomous Region sets a poor example and further empowers the CCP at a fraught moment.”

The chairs cautioned the move had implications for US supply chains, which have been hit by the Covid-19 pandemic. 

“The ongoing Covid-19 pandemic has exposed the need to strengthen the American supply chain. Enduring weakness in the supply chain, coupled with American companies offshoring jobs and capacity to China, constitutes a growing threat to American national security,” they said.

Congress recently passed the Uyghur Forced Labour Prevention Act, which requires companies importing goods from Xinjiang to prove they are not acquired using Uyghur forced labour. 

The letter also asks if Tesla intends to expand operations in Xinjiang, and “if so, please describe why Tesla is operating in the heart of a region under increased scrutiny for genocide”.

The letter referenced research by the US-Chinese Economic and Security Review Commission which found nearly 85% of American businesses were not considering relocating manufacturing to China or sourcing from there. 

“This figure and requisite corporate attitudes must change if we are going to stand in opposition to forced labour and human rights abuses that are tantamount to genocide,” they said. 

The Council on American-Islamic Relations (CAIR) has called for Tesla to close the showroom immediately. 

Ibrahim Hooper, national communications director at CAIR, said: “No American corporation should be doing business in a region that is the focal point of a campaign of genocide targeting a religious and ethnic minority.

“Elon Musk and Tesla must close this new showroom and cease what amounts to economic support for genocide.” 

America’s decision to ban goods using forced labour Xinjiang echoed similar policies introduced by the European Commission, which recently announced it would ban imports from the area. 

Tesla has been approached for comment. 

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