By David Shepardson

WASHINGTON (Reuters) – The top Democrat on the House Budget Committee said on Friday that Republicans in Congress would protect Elon Musk’s Chinese investments by removing provisions restricting U.S. investments.

Representative Rosa DeLauro said in a letter that Musk, CEO of electric car maker Tesla, may have upended the government funding process to eliminate a provision that, given his “extensive investments in China in key sectors and his personal ties to China.” “U.S. investment in China would regulate Chinese Communist Party leadership and questions the real reason for Musk’s opposition to the original financing deal.”

Tesla did not immediately respond to a request for comment. Musk published a series of critical posts about DeLauro on X on Friday, including one that said she “must be expelled from Congress!”

President-elect Donald Trump has named billionaire Musk to co-lead a project to cut government costs. Musk helped fuel online opposition to a government financing law that would have included China’s investment restrictions.

“Musk’s investments in China and his ties to the Chinese Community Party have only grown in recent years, with Tesla’s Shanghai factory producing about 50 percent of Tesla’s global automobile production,” DeLauro wrote.

Nearly a quarter of Tesla’s global revenue in 2023 came from sales of Chinese-made vehicles from its Shanghai factory, DeLauro said, adding that Tesla has broken ground on a $200 million factory in China, to produce large batteries critical to its electric vehicle supply chain.

She added that advocates for regulating U.S. investments in China “have advocated for the addition of major battery manufacturers to the list of technologies subject to foreign investment review.”

In October, the Treasury Department approved 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.

In the House, DeLauro promised to continue fighting for supplies. “This is something that simply must be done to protect our supply chains and our critical capabilities,” she said, adding that Musk had “urged Republicans to retract their words.”

(Reporting by David Shepardson; Editing by Leslie Adler and David Gregorio)