Tesla reportedly may split off China business ahead of SpaceX merger
Tesla is reportedly considering spinning off, selling, or closing its China business to pave the way for a merger with SpaceX, according to The Wall Street Journal. Such a move would be significant given China's role as both a key market and production hub.
The Wall Street Journal, citing unnamed sources, reports that Tesla is weighing the complete separation of its China business to facilitate a merger with aerospace and defense company SpaceX. Some Tesla executives have reportedly been told to prepare for a separation of the China operations, with possible scenarios including a spinoff, sale, or closure.
The company could reportedly move fairly quickly because CEO Elon Musk had already instructed executives to prepare for a split in the event that Beijing invades Taiwan. Removing China from Tesla's global operations could make it easier to integrate the company into SpaceX, which is a defense contractor required to follow strict rules on citizenship and national security.
Such a step would also be a major concession, as China has come to dominate Tesla's business. It serves not only as a key market for the company's electric vehicles, but also as a manufacturing hub that supplies Asia and Europe. A separation would therefore mean losing a significant sales market and one of the main production centers.
