Elon Musk Denies Reports of Tesla China Sale

Reports of major changes to Tesla’s global footprint have been firmly dismissed. After media suggested executives were preparing a sale or spinoff of the company’s China operations to clear the way for a Tesla-SpaceX merger, Elon Musk publicly rejected the claim.

Replying on X to a since-deleted post about the rumor, Musk said, “This is fake news.” He then clarified that such talks have never occurred, writing: “This has never even come up in a discussion ever. Absurdly fake news. People should assume news is fake until proven otherwise.”

Breaking Down the Rumors

Musk’s denial followed a Wall Street Journal report alleging Tesla advisers explored options to isolate or sell parts of its China operations. The discussions reportedly included setting up a separate sales entity for Giga Shanghai exports or spinning off the entire China division to help navigate regulatory issues ahead of a potential merger with SpaceX.

Speculation about a corporate combination has intensified in recent months. Talk of a Tesla–SpaceX merger hit a peak after SpaceX’s blockbuster IPO last month, which valued the company at $2.2 trillion. While some of the excitement has cooled, SpaceX remains the ninth most valuable company globally with a market cap of $1.44 trillion at the time of writing.

SpaceX is a major U.S. defense contractor involved in national security and satellite programs, while Tesla has substantial operations in China, including Giga Shanghai. Any merger would likely face regulatory resistance in both the U.S. and China. Musk’s remarks leave no ambiguity about Giga Shanghai’s current status.

Deepening Ties Between Tesla and SpaceX

Although a sale of the China division has been ruled out, operational ties between Tesla and SpaceX continue to expand. A corporate merger has been discussed for years, even before SpaceX became a public company.

Tesla currently holds a direct stake in SpaceX, owning 18,990,195 Class A common shares of SpaceX. That position was created when SpaceX acquired Musk’s AI venture, xAI (now operating as SpaceXAI).

The companies also collaborate on hardware development, partnering with Intel on the TERAFAB AI chip project to build advanced semiconductor manufacturing infrastructure in the U.S.

As Tesla evolves beyond traditional automotive manufacturing into an AI and robotics platform, shared technologies between electric vehicles and space systems have expanded significantly. With SpaceX acquiring xAI and targeting orbital AI data centers, shared compute and hardware designs are bringing the two companies closer together.

Despite the growing synergies and recurring merger chatter, Giga Shanghai remains Tesla’s primary global export hub. Musk’s comments indicate that severing ties with the site of its largest production facility was never under consideration.