Tesla Draws Criticism After Opening Dealership in Xinjiang

Tesla came under fire from political leaders and human rights groups Tuesday after announcing it would open a dealership in the Xinjiang region, where China is accused of detaining hundreds of thousands of Muslims in indoctrination camps.

“Together let’s start the journey of pure electricity in Xinjiang,” Tesla said in a post on Weibo, the Chinese social media site. The post included photos of a ribbon cutting at the dealership in Urumqi, the regional capital, and a Tesla sedan decorated with red and white balloons.

“Nationless corporations are helping the Chinese Communist Party cover up genocide and slave labor in the region,” Senator Marco Rubio, Republican of Florida, said on Twitter.

Mr. Rubio noted that the announcement came soon after President Biden signed legislation that would ban the import of a wide array of products made in Xinjiang unless companies can prove that they were not made with forced labor.

Tesla is not the only carmaker operating in Xinjiang. Volkswagen, which sells more cars in China than any other country, has faced criticism for operating a factory in Urumqi. The automaker has said that it does not use forced labor.

China is the world’s largest car market and is growing, while sales in Europe and the United States are stagnant. Carmakers’ dependence on China makes them susceptible to pressure from government officials to establish operations in Xinjiang, an arid region in the country’s northwest that has lagged other regions in economic development.

Tesla, which dominates sales of electric cars around the world, operates a factory in Shanghai that Chinese officials have allowed it to run without a local joint venture partner, a privilege that it had not previously granted to other foreign automakers. China is one of the biggest markets for the company’s cars, and Tesla exports vehicles from the Shanghai factory to other countries, too.

China has denied repressing members of the Uyghur ethnic group, and mounted a determined propaganda campaign to push the narrative that Xinjiang is a happy, prosperous place.

The criticism of Tesla tarnishes what was otherwise a triumphant moment for the carmaker after it announced that sales in 2021 rose almost 90 percent, to 936,000 vehicles. The increase was more than analysts expected and prompted Tesla shares to soar 13 percent. The stock lost ground Tuesday.

Michael Forsythe contributed reporting.