Musk Denies Report of Tesla China Split

Elon Musk dismissed as “absurdly fake news” a Wall Street Journal report that Tesla executives had been told to prepare for a separation of the company’s China business ahead of a potential merger with SpaceX.

Tesla advisers have discussed options including a spin-off, sale or closure of the China operation, the newspaper reported, citing people familiar with the matter. Musk said the issue had never been discussed.

“This has never even come up in a discussion ever”, he wrote on X. “Absurdly fake news”.

A merger between Tesla and SpaceX could face geopolitical and regulatory hurdles, particularly in China. SpaceX is a major US defense contractor involved in national security and satellite programs, while Tesla operates wholly owned manufacturing facilities in China.

Unlike many foreign automakers, Tesla does not run its Chinese vehicle business through a joint venture with a local partner.

Gigafactory Shanghai is Tesla’s largest and most productive plant worldwide and its main export hub for Europe, Canada and the Asia-Pacific region. It has historically accounted for more than half of the company’s global deliveries.

The Wall Street Journal also reported that executives had discussed creating a separate sales entity to handle exports from the Shanghai plant.

Investors and analysts have long speculated about a merger between Tesla and SpaceX, with discussion intensifying during preparations for SpaceX’s record $75bn initial public offering.

JPMorgan analysts have warned that securing regulatory approval for such a deal would be extremely difficult, particularly in China, where SpaceX’s ties to the US government could raise national security concerns.

(Reuters, lud)