Elon Musk has dismissed as fake news a Wall Street Journal report claiming Tesla executives were ordered to prepare for a separation of the automaker's Chinese operations to facilitate a potential merger with SpaceX.
The Journal reported that advisers had weighed options including a spin-off, sale, or closure of the China business, citing geopolitical tensions and SpaceX's role as a major U.S. military contractor. Some Tesla managers had begun planning separation details, with China accounting for roughly 18 percent of Tesla's total sales in the first half of 2026. The Shanghai factory produces more than half of Tesla's global vehicle output and exports to markets worldwide outside the United States.
The speculation follows SpaceX's record initial public offering in June, which raised approximately $86 billion, though shares have since fallen well below their offering price. Tesla has already decided to stop using Chinese-supplied components at its U.S. factories by 2027.