Tesla CEO Elon Musk has denied a media report claiming the electric vehicle maker was considering separating its China business ahead of a potential merger with SpaceX, calling the report "absurdly fake news."
Responding to a Wall Street Journal report on X, Musk wrote, "This has never even come up in a discussion ever. Absurdly fake news."
His comments came after the newspaper reported that Tesla executives had been asked to prepare options for restructuring the company's China operations amid discussions about a possible integration with SpaceX.
According to the report, Tesla's advisers had explored multiple scenarios for its China business, including a spin-off, sale or even a complete shutdown. However, the report added that no final decision had been made and that any restructuring plans remained subject to change.
The speculation stems from the complex geopolitical and regulatory challenges that would likely arise if Tesla and SpaceX were to merge. While Tesla has a major manufacturing presence in China, SpaceX is one of the United States' leading defence contractors, heavily involved in national security and satellite programmes. Any combination of the two companies could face heightened scrutiny from both Washington and Beijing.
The Wall Street Journal also reported that Musk had previously instructed Tesla executives to maintain a clear separation between the company's US and China operations. The strategy was reportedly designed to ensure that Tesla's American business could continue operating independently if tensions between the US and China escalated.
Unlike many foreign automakers in China, Tesla operates its Chinese manufacturing business through a wholly owned subsidiary rather than a joint venture with a local partner. Its Gigafactory Shanghai is the company's largest and most productive manufacturing facility, serving as a key export hub for Europe, Canada and several Asia-Pacific markets.
The Shanghai factory has historically accounted for more than half of Tesla's global vehicle deliveries and has an annual production capacity of over 950,000 vehicles. China is also Tesla's second-largest market after the United States, although the company has been facing growing competition from domestic electric vehicle makers, particularly BYD.
Interest in a potential Tesla-SpaceX merger has intensified in recent months, especially during SpaceX's record-breaking $75 billion initial public offering process. Earlier this month, Musk declined to rule out combining the two companies, saying their technologies and operations are becoming increasingly interconnected.
Although the speculation is not new, The Wall Street Journal reported last week that Musk had declined to rule out combining the two companies earlier this month, saying their technologies and operations were becoming increasingly interconnected.
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