Tesla is reportedly considering divesting its entire China operations to smooth the path for a potential merger with SpaceX, according to the Wall Street Journal.
The newspaper, citing unnamed sources, reported that some Tesla executives have been instructed to prepare for a separation of the China business, which could involve a spinoff, sale, or outright closure. The move would be relatively swift because CEO Elon Musk had already directed executives to plan for such a split in the event of a Beijing-led invasion of Taiwan.
Separating China from Tesla's global footprint could facilitate integrating the company into SpaceX, a defense contractor subject to strict citizenship and national security regulations. This would mark a significant concession, as China has become central to Tesla's operations—not only as a key vehicle market but also as a production hub serving broader Asia and Europe.
As of 2026, Tesla has not publicly confirmed these plans, and the strategic rationale reflects both geopolitical tensions and regulatory complexities in the aerospace-defense sector.
via TechCrunch