Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk has dismissed reports of the EV giant mulling the sale of its Chinese arm that could have reportedly paved the way for a potential merger with Space Exploration Technologies Corp. (NASDAQ:SPCX).
Elon Musk Says Sale Has Never Been Discussed
According to a report by the Wall Street Journal on Thursday, executives of the company were told to prepare for a separation with the Chinese business, with possible options also including a spinoff or a closure of the business, the report said, citing anonymous sources familiar with the matter.
Musk, responding to user Whole Mars Catalog, dismissed the rumors. “This has never even come up in a discussion ever,” the Tesla CEO said. He added that the report was “absurdly fake news,” before urging people to “assume news is fake until proven otherwise.”
This has never even come up in a discussion ever.
— Elon Musk (@elonmusk) July 31, 2026
Absurdly fake news.
People should assume news is fake until proven otherwise.
Tesla’s China Operations
China is an integral part of Tesla’s business, with its Gigafactory in Shanghai catering not just to the Chinese market, but also to other countries via exports. Tesla’s Model Y remains a popular model in China, with the company topping sales charts in the country.
Tesla Model Y L, which is a six-seater trim of the Model Y SUV, was recently introduced in the U.S. market. However, the Model was first unveiled in China last year as an exclusive trim level for the Chinese market. Tesla was also weighing introducing it in Europe.
Humanoid Robot Ban
However, Tesla’s China business could be affected by the Federal Communications Commission (FCC) imposing a ban on foreign humanoid robots’ entry into the U.S. market, citing security concerns. Beijing criticized the move, saying that it harms trade relations between the countries.
China also threatened retaliatory measures, which could include restrictions on U.S. companies’ access to rare earth minerals, which are crucial for almost every technology today, as well as broader restrictions on accessing the Chinese market. Such a move could prove detrimental to Tesla’s Optimus production in California.
According to Benzinga Edge Rankings, Tesla provides satisfactory Quality and Growth, but poor Value. It also fails to provide a favorable price trend in the Short, Medium and Long term.
Price Action: Tesla shares were up 1.90% at $314.72 during overnight trading on Thursday.
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