Boca Chica, Texas – Tech billionaire and Tesla boss Elon Musk dismissed a new report claiming the electric carmaker is considering a sale of its China business to help pave the way for a merger with SpaceX.
“This has never even come up in a discussion ever,” Musk wrote on X in response to a new report by the Wall Street Journal (WSJ). “Absurdly fake news. People should assume news is fake until proven otherwise.”
The WSJ, citing a source familiar with the matter, reported that Tesla executives had been instructed to prepare for a potential separation of the company’s China operations ahead of a potential merger with SpaceX.
A second source told the newspaper that advisers had discussed options including a spin-off, sale, or closure of the China business.
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Tesla’s Shanghai factory accounts for more than half of the company’s global vehicle production.
Speculation about a possible merger between Tesla and SpaceX, also led by Musk, has circulated for some time – during Tesla’s quarterly earnings call last week, Musk did little to dispel the rumors.
Asked by an analyst about a possible combination, he acknowledged there were overlaps between the companies but said a quarterly earnings call was not the appropriate forum to discuss a merger.
“It is got to be done with the appropriate process,” Musk said, before handing over to Tesla’s chief legal officer, Brandon Ehrhart, who highlighted joint projects.
A merger between Tesla and SpaceX would not be possible while Tesla retains its China business, according to the WSJ. This is largely because SpaceX is key contractor for US spaceflight initiatives and holds numerous government contracts.
The journal said Musk had already structured Tesla’s China operations so they could be separated in the event of geopolitical tensions between Washington and Beijing.
