Report That Tesla Considering Sale of Chinese Business Reportedly Completely False

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There hasn’t really been a lot of notable news from Tesla lately. Even on hardcore Tesla fan sites, the news this year has often been little tidbits that mean more or less nothing and end up leading nowhere significant. There have been times when I’ve thought, “Hmm, I must be missing a lot — what’s been going on at Tesla?,” only to go explore and find out there’s no real news out there — even from the most full-time Tesla news sources. When I saw news this morning, though, that Tesla might sell the Chinese arm of the business in order to prepare for a SpaceX merger, I was like, “WOWZA, that is some huge news if it happens!”

The rationale there is that SpaceX is a US military contractor and cannot have strong business links to China. Reports were that Tesla advisers had discussed ways Tesla could potentially separate from its Chinese business — a spinoff or a sale, for example.

However, according to Elon Musk, this is all nonsense. “This has never even come up in a discussion,” he posted early this morning on X. (I’ll come back to some caveats here in a minute, though.) Frankly, it would be absolutely wild if Tesla sold its Chinese business. About half of Tesla’s vehicle production and sales come out of its Chinese factory. Also, the Chinese EV market is by far the biggest EV market in the world — accounting for about half of the world’s EV sales — and Tesla does quite well there. Its Chinese factory is key for Tesla’s presence in several other markets, too. So, splitting off its Chinese business would almost be like cutting the company in half, and it would dramatically change Tesla’s role in the auto market. Hence the reason it would be such big news, but also hence the reason it’s apparently not actually on the table.

That doesn’t really mean that Elon Musk is 100% correct in his statement and the reporting is false. Musk claims it’s “absurdly fake news,” but just because Musk wasn’t in a discussion about this or it wasn’t mentioned to him doesn’t mean that some Tesla advisers never discussed the possibilities here. If he’s asked some financial or legal firms to explore the merger of SpaceX and Tesla — or even if some Tesla advisers have decided to do so on their own — it would only make sense to start with all the issues on the table and a variety of potential solutions. The China business is a notable issue. More likely than not, such discussions have taken place by some advisers. The fact that Musk wasn’t part of them doesn’t make that “absurdly fake news.”

Also, Musk has made very strong statements like this in the past on reporting that did eventually turn out to be based on real-world discussions and activities — even significant ones involving him! Sometimes he has made a broad claim like this when it was only one or two minor details in a story that were off. Not to mention all the crazy and completely false conspiracy theories and misinformation he has put out there late at night or hastily tweeting.

Though, I think the core point on this story is this: Elon Musk does not consider splitting off Tesla’s Chinese business as an actual possibility. It’s not going to happen. Tesla’s China business is far too important to the company, so even if it came down to keeping that versus merging with SpaceX (if there were no other ways around the issue), Musk doesn’t seem willingly to go that route. (For now. If the company’s China business went south, perhaps that would change….)