Reports suggesting major changes to Tesla’s global footprint are being explicitly shut down by leadership. Following media claims that executive teams were prepping a potential sale or spinoff of operations in China to clear the way for a Tesla-SpaceX merger, Elon Musk took to social media to deny the rumors completely.
Responding directly to a since-deleted post referencing the claim on X, Musk said, “This is fake news.” He followed up shortly after to clarify that no such discussions have ever even taken place behind closed doors, 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 follows a Wall Street Journal report claiming Tesla advisers discussed various paths to isolate or sell off its Chinese business units. According to the report, discussions centered around creating a separate sales entity for Giga Shanghai exports, or executing a total spinoff of the Chinese division to ease regulatory hurdles ahead of a potential merger with SpaceX.
Speculation surrounding a potential corporate combination has escalated sharply in recent months. Chatter surrounding a merger between Tesla and SpaceX reached a fever pitch after the latter’s blockbuster IPO last month, which turned the space venture into a public giant valued at a whopping $2.2 trillion. Some of the hype has since cooled off, but SpaceX is still the ninth most valuable company in the world with a market cap of $1.44 trillion at the time of writing.
SpaceX is a major U.S. defense contractor that’s part of several national security and satellite programs, while Tesla has expansive business operations in China, not the least of which is Giga Shanghai. A marriage between the two companies would undoubtedly result in regulatory pushback, both in the U.S. and China. That said, Musk’s public response leaves no room for ambiguity regarding the current status of Giga Shanghai.
Deepening Ties Between Tesla and SpaceX
While a sale of the China division has been dismissed, operational overlap between Tesla and SpaceX continues to grow. A corporate merger has been discussed for years, even before SpaceX made its official public debut.
Tesla currently holds a direct financial stake in the aerospace giant, owning 18,990,195 Class A common shares of SpaceX. That equity position was established when SpaceX acquired Musk’s AI venture, xAI (now operating as SpaceXAI). The two companies also maintain joint hardware development projects, partnering with Intel on the TERAFAB AI chip project to build advanced semiconductor manufacturing infrastructure in the U.S.
As Tesla transitions beyond traditional automotive manufacturing into an AI and robotics platform, shared technology between electric vehicles and space systems has reached unprecedented levels. With SpaceX acquiring xAI and setting its sights on building out orbital AI data centers, shared compute and hardware designs keep drawing the two companies closer together.
Even as corporate synergies grow and merger talks come to a head, Giga Shanghai remains Tesla’s primary global export hub. Musk’s direct response makes it clear that cutting ties with the home of its largest production facility was never on the table.
