Elon Musk has denied reports that Tesla is planning to split its China business. The Tesla CEO responded on his social media platform X on July 31.
The Wall Street Journal reported that executives were asked to prepare a separation of the China operations. This could have enabled a potential merger with SpaceX.
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Advisers discussed options such as a spin-off, sale, or closure of the China business.
They also considered creating a separate sales entity for Shanghai exports to reduce geopolitical risks.
Musk rejected these claims directly. "This has never even come up in a discussion ever," he said.
"Absurdly fake news."
The speculation follows SpaceX's record $85.7 billion initial public offering. Prediction market platform Kalshi shows a 74% probability of a Tesla-SpaceX merger before May 2027.
Regulatory Hurdles
Merging the two entities presents regulatory challenges. SpaceX is a major U.
S. defense contractor involved in national security programs.
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Tesla operates wholly owned manufacturing assets in China without a local joint venture partner.
JPMorgan analysts noted that securing regulatory approvals in China would face practical bottlenecks due to national security concerns.
Despite potential restructuring, SpaceX executives acknowledged that unifying operations could simplify administrative structures. "Might make Elon's life a little easier," said Gwynne Shotwell, President and COO of SpaceX.
During a recent conference call, Musk noted increasing operational overlap between the companies. This includes joint semiconductor projects like Terafab and Starlink integration in Cybercab vehicles.
"As you can tell from the many collaborations on so many fronts with SpaceX, there's more and more overlap, especially with Terafab, that's really going to be a gigantic project," Musk said.
Gigafactory Shanghai remains Tesla's largest global manufacturing site.
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It produces over 950,000 vehicles annually and supplies key markets across Europe, Canada, and the Asia-Pacific region with over 95% locally sourced components.
