AUSTIN, United States – Elon Musk has dismissed reports that Tesla is preparing to separate its China business ahead of a possible merger with SpaceX, describing the claims as completely false.
Okay News reports that the denial followed a Wall Street Journal report claiming Tesla executives had been instructed to consider options including a spin-off, sale or closure of the company’s China operations. Responding on his social media platform X, Musk said the issue had “never even come up in a discussion ever” and called the report “absurdly fake news.”
The report suggested advisers had explored restructuring Tesla’s China business as speculation grows over a potential combination of Tesla and SpaceX. Such a move would likely face significant geopolitical and regulatory obstacles because SpaceX is a major U.S. defence contractor, while Tesla operates large manufacturing facilities in China.
Musk recently declined to rule out the possibility of a merger between his electric vehicle company and SpaceX, saying the two businesses are becoming increasingly interconnected. However, analysts have warned that obtaining regulatory approval, particularly from Chinese authorities, would be extremely challenging due to national security concerns surrounding SpaceX’s government contracts.
Tesla’s Gigafactory Shanghai remains the company’s largest manufacturing plant and serves as a major export hub for markets including Europe, Canada and the Asia-Pacific region. The facility has an annual production capacity exceeding 950,000 vehicles and has historically accounted for more than half of Tesla’s global deliveries.
The report also claimed Tesla executives had discussed creating a separate export entity for vehicles produced in Shanghai and limiting direct access between employees in China and other parts of the company. Tesla manufactures the Model 3 and refreshed Model Y in China using more than 95% locally sourced components, with many of its domestic suppliers also serving the company’s global operations.
