Elon Musk rejected as “fake news” a report claiming Tesla executives were preparing to separate the company’s China operations ahead of a possible merger between Tesla and his space company, SpaceX.
Tesla advisers have discussed possible options for a separation, including a spin off, sale or closure, the Wall Street Journal reported on Thursday, adding that it was unclear how quickly Tesla could move on the China business and that the plans could change, Reuters reported.
“This has never even come up in a discussion ever,” Musk, the world’s richest person, said on his X social media account in response to the report. “Absurdly fake news”.
A merger between Musk’s Tesla and SpaceX would raise geopolitical and regulatory hurdles, particularly in China, because SpaceX is a major U.S. defense contractor involved in national security and satellite programs, while Tesla operates wholly owned manufacturing facilities in China.
Tesla and SpaceX could not be immediately reached for comment outside regular business hours.
Investors and analysts have long speculated about the possibility of combining Musk’s EV and space firms, with the discussion intensifying during SpaceX’s record $75 billion initial public offering process.
Musk had in recent years instructed Tesla executives to organize the company with a “laser” between its U.S. and China businesses, aiming to ensure that in the event of geopolitical strife between the two countries, at least the U.S. half of Tesla would survive, the Journal said, citing sources.
Unlike many foreign automakers, Tesla’s Chinese vehicle business is not structured as a joint venture with a local partner.
Tesla’s Gigafactory Shanghai remains its largest and most productive plant globally, serving as its key export hub for Europe, Canada and the Asia-Pacific region.
The facility historically accounts for more than half of Tesla’s global deliveries, with an annual production capacity of more than 950,000 vehicles.