Tesla CEO Elon Musk denied reports on July 31, 2026, that the company is considering selling or spinning off its Chinese operations. Musk labeled the claims as fake news on X, stating that no such discussions have occurred.
The Wall Street Journal reportedly suggested Tesla was exploring a separation to address regulatory hurdles regarding a potential SpaceX merger. SpaceX operates as a primary U.S. defense contractor, which complicates a merger with a company heavily integrated in China.
Tesla’s Shanghai Gigafactory currently produces over 50% of the company's global vehicle output. Any potential merger would face significant national security scrutiny from both U.S. and Chinese government officials.