Elon Musk has denied a report suggesting Tesla is exploring a sale or spinoff of its China business as part of preparations for a future merger with SpaceX.
The report, published late Thursday by The Wall Street Journal, claimed Tesla had been looking at ways to separate its Chinese operations from its U.S. business amid rising geopolitical tensions between Washington and Beijing.
According to the report, one option under consideration was selling or spinning off Tesla’s China operations, while another was creating a more independent corporate structure that could eventually facilitate a merger with SpaceX.
Shortly after the story was published, Musk responded on X with a brief but unequivocal denial, “Fake news.” He later went even further to say “This has never even come up in a discussion ever” and calling it “Absurdly fake.”
This has never even come up in a discussion ever.
— Elon Musk (@elonmusk) July 31, 2026
Absurdly fake news.
People should assume news is fake until proven otherwise.
The Journal cited unnamed sources who claimed Musk has for several years pushed Tesla to establish what was internally described as a “laser” separating its U.S. and China businesses. The alleged goal was to ensure Tesla’s American operations could continue operating independently if relations between the two countries deteriorated.
The report also suggested that separating Tesla’s China business could become increasingly important if Musk ever pursued combining Tesla with SpaceX. Such a move would likely face intense regulatory scrutiny given SpaceX’s role as a major U.S. defense contractor and Tesla’s significant manufacturing presence in China.
While Tesla has previously taken steps to localize operations in different regions and reduce supply chain risks, there has been no public indication from the company that it plans to divest or spin off its China business.
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