Tesla Risks Political Blowback By Opening Showroom in China’s Uyghur Muslim Region

Several major U.S. companies have been caught up in the political fallout surrounding Xinjiang recently.

A Tesla Model S car on display at the 16th Shanghai International Automobile Industry Exhibition in Shanghai on April 20, 2015. JOHANNES EISELE/AFP/Getty Images

Elon Musk isn’t known for letting geopolitical tensions get in the way of his business. Despite an economic and ideological spat that has strained the relation between the U.S. and China in recent years, Musk has managed to open a giant Tesla factory in China (with generous support from local government) and make Tesla the top-selling electric vehicle brand there. His latest move is opening a Tesla showroom in China’s Xinjiang province, where Western media estimate more than 1 million Uyghur Muslims have been held in concentration camps—which the Chinese government argue are vocational education centers to counter religious extremism and terrorism.

Tesla announced the opening of the showroom, located in Xinjiang’s capital city, Urumqi, on December 31 through its official account on Chinese social media site Weibo. “On the last day of 2021, we meet in Xinjiang. In 2022, let us together launch Xinjiang on its electric journey!” Tesla wrote in the post.

Urumqi is the second largest city in northwestern China, and thus it’s not unusual for a major automobile brand like Tesla to open an outpost there. Other foreign auto brands, including Volkswagen, General Motors and Nissan, also have showrooms in the city. However, as reports surfaced in recent years about the Chinese government’s crackdown on Uyghur Muslims in the region, Xinjiang has become a politically charged location when it comes to cross-border business operation.

The Council on American-Islamic Relations (CAIR), an organization based in Washington, D.C., on Monday urged Tesla to close the showroom and “cease what amounts to economic support for genocide.”

“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,” CAIR’s communications director, Ibrahim Hooper, said in a statement.

Tesla hasn’t responded to CAIR’s criticism yet.

Several major U.S. companies have been caught up in the political fallout surrounding Xinjiang recently. Last week, President Joe Biden signed a law (Uyghur Forced Labor Prevention Act) banning American companies from importing goods from Xinjiang unless they can prove the materials were not made through forced labor.

Meanwhile, China’s ruling Communist Party has been pushing foreign companies to take sides on the Xinjiang issue. On December 31, a Chinese state discipline agency threatened Walmart with a boycott after some customers alleged online that Walmart intentionally excludes Xinjiang products from its Walmart and Sam’s Club stores in China.

Earlier that month, Chinese state media attacked Intel for asking its suppliers in a leaked letter to avoid sourcing goods from Xinjiang. Intel apologized to Chinese consumers on December 23.

The White House declined to comment specifically on the Tesla situation. A spokeswoman for the White House National Security Council was quoted by The Wall Street Journal saying that “in general the private sector should oppose the Chinese government’s human-rights abuses and genocide in Xinjiang.”

Tesla currently has showrooms and customer service outposts in 30 regions and provinces in mainland China, Hong Kong and Macau, according to the company’s website. Tesla is the only foreign automaker that wholly owns its operation in China. All other foreign carmakers operate through joint ventures with local companies, per China’s policy to protect homegrown auto industry.

Volkswagen, which operates a factory in Urumqi, has faced similar criticism from human rights activists outside China over its decision to maintain a factory there. Tesla Risks Political Blowback By Opening Showroom in China’s Uyghur Muslim Region