Tesla Considers Spinning Off China Business to Advance Potential SpaceX Merger

According to informed sources, Tesla is considering selling its China operations—a move aimed at paving the way for a potential merger between the company and SpaceX. In recent years, Elon Musk has instructed Tesla executives to clearly separate the company’s U.S. and Chinese businesses. Some executives have been told to prepare for divesting the China operations ahead of any potential merger. Advisors have already explored various separation options, including spin-offs, sales, or even shutting down the business. In June this year, Gwynne Shotwell, President of SpaceX, stated in an interview that Tesla and SpaceX are moving toward the same goals and did not rule out a future merger, noting existing synergies between the two companies. However, she emphasized that her current focus remains on SpaceX’s day-to-day operations and expansion plans. Tesla and SpaceX previously shared employees and board members and have now launched substantive collaboration on a $55 billion semiconductor manufacturing initiative called “Terafab,” aimed at developing chips for SpaceX’s AI-powered satellites, Tesla’s Robotaxi, and its humanoid robots.