Elon Musk has dismissed reports suggesting Tesla was exploring a merger with SpaceX, rejecting claims that the electric vehicle maker considered separating its China business to make such a deal possible. The comments came after speculation followed SpaceX’s public debut in June 2026, with Musk calling the reported discussions “fake news.”
Tesla Expands Beyond Electric Vehicles
Tesla has continued expanding its focus beyond electric vehicles, with plans to grow its robotaxi business through the Cybercab and manufacture the Optimus humanoid robot.
The Optimus program requires retooling part of Tesla’s Fremont, California, facility, a move that has contributed to the discontinuation of the Model S and Model X.
Merger Speculation Emerged After SpaceX IPO
After Musk took SpaceX public in June 2026, speculation emerged that Tesla could broaden its business by merging with the aerospace company. Such a combination would create a publicly traded company spanning electric vehicles, robotics, rockets, and satellite technology.
However, Reuters reported that Musk rejected a Wall Street Journal report claiming Tesla was considering separating its China operations to facilitate a potential merger. Musk described the report as “fake news.”
China Operations Present a Major Challenge
A significant obstacle to any potential merger would be Tesla’s operations in China, where the company runs Gigafactory Shanghai.
Because SpaceX is a major U.S. defense contractor involved in national-security and satellite programs, combining the two companies could raise geopolitical concerns. The broader U.S. focus on Chinese-linked connected technology is reflected by the fact that Polestar has been barred from selling new 2027-model-year vehicles in the country.
Musk wrote on X, formerly Twitter, “This has never even come up in a discussion ever. Absurdly fake news. People should assume news is fake until proven otherwise.”
Gigafactory Shanghai Remains a Key Asset
Gigafactory Shanghai has an annual production capacity of more than 950,000 vehicles. Its production serves both the Chinese market and export destinations, including Canada.
According to the report, this production footprint helps explain why the Shanghai-built Model 3 sold in Canada costs roughly $8,000 less than the U.S.-built version.
Potential Benefits of a Combined Company
If a merger were to take place, Tesla would not necessarily add rocket technology to vehicles such as the Roadster. However, the company could gain exposure to SpaceX’s satellite business.
Starlink could potentially support connected services, including in-car data coverage in remote areas and communications for a future robotaxi fleet.
Musk Denies Any Changes to China Business
While the Wall Street Journal reported that Tesla had considered separating parts of its China operations as a geopolitical safeguard, Musk said no sale, spin-off, or closure of the company’s China business had ever been discussed.
Musk’s comments directly rejected the reported merger-related discussions, reiterating that no such conversations had taken place.
