Tesla is reportedly considering a separation of its China operations to facilitate a potential merger with SpaceX. The Wall Street Journal reports that advisors have discussed options including a sale, spinoff, or closure of the division. China currently accounts for over half of Tesla's global production.
The move aims to resolve geopolitical and regulatory conflicts arising from SpaceX’s role as a major U.S. defense contractor. Tesla’s extensive manufacturing presence in China creates friction with these defense interests.
CEO Elon Musk dismissed the report as fake news in a social media post. A Tesla representative in China also labeled the claims as false information. Musk previously declined to rule out a combination of his companies during a recent earnings call.