Tesla weighs splitting China business amid possible SpaceX merger

3 min read

The wall street journal reported that Tesla has discussed separating its China business — by sale, spinoff, or closure — as preparations proceed for a possible merger with SpaceX, though Elon Musk and a Tesla China representative denied the report. The complication stems from SpaceX's significant U.S. government and classified work, which could prompt Beijing to demand limits on SpaceX influence over Tesla's China operations. Shanghai is Tesla's largest factory, responsible for more than half of global deliveries, and China was about 18% of Tesla sales in the first half of 2026, so any split could have material operational effects.

Tesla is considering separating its China operations ahead of a SpaceX merger