Tesla, Inc. (TSLA.US) is reportedly considering divesting its Chinese operations to merge with SpaceX (SPCX.US)? Musk refuted this: "We have never discussed it; it's purely 'absurd fake news.'"

Tesla, Inc. (TSLA.US) CEO Elon Musk has denied reports that the electric vehicle giant is considering selling its operations in China. Earlier reports suggested that selling its China business could pave the way for a potential merger between Tesla, Inc. and SpaceX (SPCX.US). It was reported that Tesla, Inc. executives had been asked to prepare for a separation from the China business, with possible options including spinning off the Chinese operations into a public company or shutting down the business entirely. In response to the related reports, Musk denied the claims. He stated, This has never come up in any discussions. He subsequently called the reports absurd fake news and urged people to assume news is false until proven true. Since SpaceX went public, speculation has been mounting that Musk will push for a merger between SpaceX and Tesla, Inc. due to the significant overlap in their strategic planning in the artificial intelligence (AI) sector. Musk has frequently mentioned the trend of "integration" among his companies. In a previous earnings call, he acknowledged that the business overlap between Tesla, Inc. and SpaceX is increasing but noted that the topic of a merger is not something that can be discussed in Tesla, Inc.'s performance meetings. In February of this year, SpaceX acquired xAI, an artificial intelligence company founded by Musk, which has since been rebranded as SpaceXAI. SpaceX and Tesla, Inc. have several business dealings: Tesla, Inc. supplies SpaceX with Megapack energy storage batteries and Cybertruck electric pickups, while SpaceXAI's AI chatbot Grok is already installed in some Tesla, Inc. vehicle models. The reports indicate that separating Tesla, Inc.'s China operations (including the Shanghai Gigafactory) could help avoid conflicts of interest that might arise from SpaceX being a major U.S. defense contractor. Such a deal aims to establish a firewall between Tesla, Inc.'s Chinese subsidiary and its U.S. operations. China is an important part of Tesla, Inc.'s business. The Gigafactory in Shanghai serves not only the Chinese market but also exports vehicles to other countries. With the Shanghai Gigafactory as the core, Tesla, Inc. accounts for more than half of global order deliveries. In the first half of 2026, the Shanghai plant delivered 468,000 vehicles, a year-on-year increase of 28.4%, setting a new high for the same period in nearly three years. Since its inception six and a half years ago, the plant has produced over 4.5 million vehicles, accounting for more than 45% of Tesla, Inc.s total global production. The Tesla, Inc. Model Y continues to maintain high popularity in China, consistently ranking among the top in sales in the Chinese market. Tesla, Inc. recently launched the Model Y L in the U.S., a six-seat version of the Model Y SUV series. This model first debuted in the Chinese market last year and was specifically developed for that market. Tesla, Inc. has also been evaluating whether to introduce this model to the European market.