Key facts
- Elon Musk denied a Wall Street Journal report about Tesla separating its China business for a potential SpaceX merger, calling it 'fake news'.
- Tesla China also dismissed the report as 'false information'.
- The Wall Street Journal cited unnamed sources suggesting Tesla executives were told to prepare for the separation of its China business.
- The report suggested separating Tesla's China operations could facilitate a merger with SpaceX due to geopolitical risks and SpaceX's defense contractor status.
- Tesla's Shanghai Gigafactory is a crucial production site and export hub for the company.
Elon Musk has vehemently denied a Wall Street Journal report that Tesla is considering separating its China business to facilitate a potential merger with his aerospace company, SpaceX. Musk labeled the report "fake news" on X, and Tesla's China unit also dismissed the claims as false.
The Wall Street Journal had reported that Tesla executives were told to prepare for the separation of its China operations, citing people familiar with the matter. The report highlighted geopolitical risks and SpaceX's status as a major U.S. defense contractor as potential drivers for such a move.
Tesla's Shanghai Gigafactory is one of its most crucial production sites globally, serving as a key export hub for Europe, Canada, and the Asia-Pacific region. China is Tesla's second-largest market. Speculation about a Tesla-SpaceX merger has been fueled by increasing technological overlap, particularly in artificial intelligence and manufacturing, with prediction markets assigning a 49% probability to a combination by mid-2027.
Tesla's stock closed 3.53% higher at $308.85 on Thursday, while SpaceX stock closed 0.31% lower at $112.20, reaching its lowest closing price historically. Despite a broader sell-off in AI stocks, Cathie Wood's ARK Invest has continued to invest in both Tesla and SpaceX, with Wood citing Starship's successful splashdown as a game-changing development for SpaceX.