Elon Musk has denied claims that Tesla may sell or separate its China operations ahead of a possible merger with SpaceX. The billionaire described the report as “fake news,” while Tesla China also rejected the story as false.
Elon Musk Denies Tesla China Sale Claims
The Wall Street Journal reported that Tesla was considering selling or spinning off its China business. According to the publication, the proposed move could remove potential obstacles to a future combination between Tesla and SpaceX.
The report claimed that Tesla executives had been asked to prepare for a possible separation of the company’s Chinese operations. However, Musk quickly dismissed the story on X.
He stated that the report was false and denied that Tesla had held discussions about selling or separating its China division.
Tesla China also responded to the claims. A representative reportedly told Chinese media outlet The Paper that the information was inaccurate.
Why Tesla’s China Business Matters
Tesla’s operations in China play a major role in the electric vehicle manufacturer’s global strategy.
The Shanghai Gigafactory is one of Tesla’s largest and most important production facilities. It manufactures vehicles for the Chinese market while also serving as a major export center for Europe, Canada and the wider Asia-Pacific region.
China is also Tesla’s second-largest market after the United States. Therefore, selling or separating the China business would represent a major structural change for the company.
The original report reportedly focused on geopolitical concerns. SpaceX works closely with the US government and operates as a major defense contractor. As a result, Tesla’s extensive business presence in China could create regulatory or political complications in any potential merger.
Tesla and SpaceX Merger Speculation Continues
Although Musk rejected the Tesla China sale report, speculation about a possible Tesla-SpaceX merger has not disappeared.
Investors have continued to discuss a combination of the two companies because their technologies increasingly overlap. Both Tesla and SpaceX are investing heavily in artificial intelligence, robotics, advanced manufacturing and energy systems.
Musk has also discussed the growing connections between his companies during previous Tesla earnings calls. His comments have encouraged further debate about whether the businesses could eventually operate under one corporate structure.
However, neither Tesla nor SpaceX has officially announced a merger agreement.
Prediction Markets Assess Merger Probability
Traders on prediction platforms are also monitoring the possibility of a Tesla and SpaceX combination.
According to the data cited in the original report, Kalshi traders placed the probability of a merger before May 2027 at approximately 49%.
Prediction market probabilities can change quickly as traders react to company announcements, market rumors and regulatory developments. Therefore, these figures reflect market expectations rather than confirmation that a deal will happen.
Tesla Shares Rise as AI Stocks Face Pressure
Tesla shares reportedly closed 3.53% higher at $308.85 on Thursday. Meanwhile, the report said SpaceX-related shares declined by 0.31% to $112.20 amid weakness across artificial intelligence investments.
The report also claimed that the SpaceX-linked asset had fallen more than 50% from its June record high.
Despite the broader sell-off in AI-related investments, Cathie Wood’s ARK Invest has continued to increase its exposure to both Tesla and SpaceX.
Wood highlighted the successful Starship splashdown as a potentially important development for SpaceX. The achievement could strengthen the company’s long-term prospects in reusable rockets, satellite deployment and future space transportation.
What Happens Next?
Musk’s direct denial has weakened the immediate credibility of the Tesla China sale story. However, it is unlikely to end wider speculation surrounding a possible Tesla-SpaceX merger.
The companies share the same chief executive and are becoming increasingly connected through artificial intelligence, manufacturing, energy and engineering.
For now, there is no confirmed plan to sell Tesla’s China business or merge Tesla with SpaceX. Investors will continue watching official company statements, regulatory developments and prediction market activity for signs of what Musk may decide next.
