Tesla is exploring a sale, spinoff, or closure of its China operations. The Wall Street Journal reports the move aims to resolve geopolitical hurdles for a potential merger with SpaceX. Combining a U.S. defense contractor with a major Chinese manufacturing presence creates significant regulatory challenges.
The Shanghai Gigafactory currently produces more than 50% of Tesla’s global vehicle deliveries. This facility also serves as the company's primary export hub.
Elon Musk previously fueled merger speculation by citing operational overlaps during a recent earnings call. Musk later dismissed the Wall Street Journal report on social media as absurdly fake news.