Elon Musk has publicly dismissed a media report suggesting that Tesla is weighing a sale of its China operations, a move speculated to clear the path for a potential merger with his aerospace company SpaceX.
The Wall Street Journal reported that Tesla had been considering divesting its Chinese business, prompting fresh scrutiny of the American carmaker’s heavy reliance on its Shanghai manufacturing hub. Musk, who leads both Tesla and SpaceX, moved quickly to shut down the speculation.
“This has never even come up in a discussion ever,” Musk wrote on his X account on Friday, calling the report “absurdly fake news.”
The Shanghai Gigafactory is one of Tesla’s most productive plants and a cornerstone of the company’s global supply chain. The facility produces vehicles for both the domestic Chinese market and for export, making any structural separation from China a complex undertaking.
China remains one of Tesla’s largest markets, though the company faces intensifying competition from domestic electric-vehicle makers such as BYD. Over recent years, Tesla has repeatedly adjusted prices in the country to defend its market share amid a broader industry price war.
The merger speculation surfaces at a time of heightened attention on the interconnections between Musk’s various ventures. His companies have increasingly drawn questions over shared technology, financing and corporate structure.
SpaceX has separately been the subject of reports about a possible tie-up with xAI, Musk’s artificial-intelligence startup, ahead of a planned public listing. Any combination involving Tesla would represent a far larger and more legally intricate transaction, given the carmaker’s status as a publicly traded company with shareholders worldwide.
Analysts have long noted that decoupling Tesla from China would be difficult. The Shanghai operation benefits from a mature local supplier network, established logistics and government support that would be costly to replicate elsewhere.
Tesla has not issued a formal corporate statement beyond Musk’s social-media remarks. The company’s stock has drawn close attention from investors weighing its growth prospects against profitability pressures.
For now, the reported deliberations remain unconfirmed, and Musk’s denial leaves the future of Tesla’s China footprint firmly in place. Any material change to the arrangement would likely require regulatory review in multiple jurisdictions and could reshape the global electric-vehicle supply chain.