Loading article…
Elon Musk calls report of Tesla separating its China operations for a SpaceX merger “absurdly fake news,” sparking a 3.5% after‑hours stock rise and renewed
Elon Musk flat‑out denied on X that Tesla is preparing to spin off or sell its Shanghai operations to facilitate a merger with SpaceX, calling the Wall Street Journal report “absurdly fake news”【1】. The denial came as Tesla shares jumped 3.5% in after‑hours trading, reviving market chatter about a possible tie‑up between the two Musk‑led firms.
| At a glance | |
|---|---|
| Company | Tesla |
| Rumor | Potential separation of China business for SpaceX merger |
| Musk’s response | “Absurdly fake news” on X |
| Share reaction | +3.5% after‑hours, price near $320 |
Musk’s terse X post—“This has never even come up in a discussion ever”—directly contradicted the Wall Street Journal story that Tesla advisers were weighing a spin‑off, sale, or closure of its China unit【1】. Despite the denial, the stock rose 3.5% to about $320 in after‑hours trading, indicating investors still view the merger speculation as a catalyst【2】. Analysts have long flagged regulatory hurdles, especially in China where SpaceX’s U.S. defense contracts clash with Tesla’s wholly owned Shanghai plant, which accounts for more than half of global deliveries【1】.
Tesla’s Shanghai Gigafactory is its largest and most productive plant, with an annual capacity exceeding 950,000 vehicles and historically contributing over 50% of worldwide deliveries【1】. The plant also serves as a key export hub for Europe, Canada, and the Asia‑Pacific, making it a strategic asset for any corporate restructuring. China remains Tesla’s second‑largest market, representing roughly 18% of total sales, and the operation relies on more than 400 local suppliers for the Model 3 and Model Y, with over 95% of components sourced domestically【1】. A separation could disrupt this supply chain and diminish Tesla’s export capabilities.
A merger would raise “practical bottlenecks” for regulators, especially in China, where SpaceX’s role as a major U.S. defense contractor—drawing 20.9% of its 2025 revenue from government contracts—creates national‑security concerns【2】. JPMorgan analysts note that such security issues could block any combined entity from operating smoothly in China, where the Shanghai plant alone underpins more than half of Tesla’s global output【2】. Musk has previously instructed executives to build a “laser” separation between U.S. and Chinese operations to safeguard the U.S. side in case of geopolitical strain【1】.
The episode underscores how quickly market sentiment can swing on Musk’s social‑media statements, while the underlying strategic importance of Tesla’s China operations remains a focal point for both investors and regulators. Whether the merger narrative will resurface depends on future disclosures from the companies.
Coverage is mostly measured — 130 of 133 reports stay neutral.
Every Monday — the token unlocks, Fed dates & catalysts set to move crypto and markets this week. So you’re never blindsided.
Free · 3-min read · one-click unsubscribe
AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 4 outlets · Jul 31, 2026 · How we report
No. Elon Musk has denied such reports, calling them "fake news," and said no discussions have taken place.
The Shanghai Gigafactory historically accounts for more than half of Tesla's global deliveries.
More than half of the roughly 463,000 EVs sold in the U.S. in the first six months of 2026 were Teslas, with the Model Y alone representing over a third of those sales.
Regulatory approvals and national‑security concerns, particularly in China where SpaceX has U.S. defense ties, could pose significant hurdles.
Tesla operates about half of all fast‑charging plugs in the United States and has opened many of its Supercharger stations to other EV brands.