Key Takeaways
- Elon Musk dismissed a report suggesting Tesla executives are preparing for a China business sale.
- The Wall Street Journal reported that Tesla advisers have discussed possible options, including spin-offs or sales.
- A merger between Tesla and SpaceX faces regulatory hurdles due to national security concerns.
Elon Musk has dismissed as 'fake news' a report suggesting executives at his electric vehicle company Tesla are preparing for a separation of its China business. The Wall Street Journal reported that Tesla advisers have discussed possible options, including spin-offs or sales.
In response to the report, Musk tweeted on his X social media account: “This has never even come up in a discussion ever,” he said, adding that it was 'absurdly fake news'.
The potential separation of Tesla's China business from its parent company SpaceX is being considered amid speculation about combining the two firms. However, a merger would face significant regulatory and geopolitical challenges.
Tesla’s Gigafactory Shanghai remains its largest and most productive plant globally, serving as a key export hub for Europe, Canada, and the Asia-Pacific region. The facility historically accounts for more than half of Tesla's global deliveries, with an annual production capacity exceeding 950,000 vehicles.
Unlike many foreign automakers, Tesla’s Chinese vehicle business is not structured as a joint venture with a local partner. Musk had previously instructed Tesla executives to organize the company with a 'laser' between its U.S. and China businesses to ensure survival in case of geopolitical strife.
While Giga Shanghai acts as a vital export pipeline, China itself remains Tesla’s second-largest market globally after the United States. However, it faces intense competition from local players such as BYD.
A merger between Musk's EV and space firms could streamline management across his businesses, according to SpaceX President and Chief Operating Officer Gwynne Shotwell, who told CNBC in June that folding the companies together 'might make Elon’s life a little easier'.
JPMorgan analysts have pointed out practical bottlenecks for regulatory approvals, particularly in China where national security concerns over SpaceX's U.S. government ties could pose problems.
Tesla and SpaceX declined immediate comment outside regular business hours.
This has never even come up in a discussion ever
Elon Musk, World’s richest person
