Tesla officially denied reports of a possible spin-off, sale, or closure of its business in China in preparation for a potential merger with SpaceX. Company representatives called the previously published information unreliable, and CEO Elon Musk described it as "fake news."

The discussions were sparked by a publication in The Wall Street Journal, which, citing unnamed sources, claimed that Tesla management had allegedly instructed to prepare options for separating the Chinese business. According to the publication, the creation of a separate structure to manage car exports from the Shanghai factory was considered, as well as the introduction of additional restrictions on the access of Chinese division employees to internal corporate data.

However, according to National Business Daily, The Paper, and other Chinese media, a Tesla China representative denied these reports, calling them false information. Elon Musk publicly expressed a similar position.

Speculation about a possible merger of Tesla and SpaceX intensified amid SpaceX's preparations for a major initial public offering, which, according to media reports, could value the company at approximately $75 billion. During Tesla's Q2 2026 earnings report, Musk indeed confirmed that cooperation between the two companies is expanding, but emphasized that any decisions about a possible merger would require official corporate procedures and are not yet in progress.

Unlike most foreign automakers operating in China, Tesla fully controls its local production without a joint venture. The company previously reported that over 95% of components for the Model 3 and updated Model Y produced in China are supplied by local manufacturers, and the network includes over 400 Chinese suppliers, which helps maintain some of the lowest production costs in Tesla's global structure.