Will Tesla Spin Off Its China Business? Elon Musk Responds
Complete. Here is the key summaryIn response to market rumors that Tesla plans to spin off its China business to facilitate a merger with SpaceX, Tesla CEO Elon Musk and Tesla China both denied the claims, labeling them as fake news. Currently, Tesla's Shanghai Gigafactory is operating normally, with production capacity continuing to ramp up. June deliveries rose 24.40% year-on-year to 89,100 units, while output at the energy storage factory also hit a record high
On July 31, Tesla CEO Elon Musk stated on social media that reports suggesting Tesla is considering spinning off its China business ahead of a transaction with SpaceX are fake news.
On July 31, market rumors circulated that Tesla was considering spinning off its China business to pave the way for a potential merger with SpaceX.
The rumors claimed that some Tesla executives had been told to prepare for this scenario, and that Tesla advisors had discussed various options, including spinning off, selling, or shutting down Tesla's China operations.
China is Tesla's second-largest market globally after the United States, and its "Gigafactory" in Shanghai has become Tesla's largest electric vehicle export hub worldwide.
Data from the China Passenger Car Association (CPCA) showed that Tesla's Shanghai Gigafactory delivered 89,100 electric vehicles in June, a year-on-year increase of 24.40%. In the first half of 2026, EV deliveries rose 28.40% year-on-year to 467,900 units.
Tesla's energy storage Gigafactory in Shanghai achieved record-high production in the first half of 2026, driving energy storage installations in the EMEA (Europe, Middle East, and Africa) region to historic highs as well.
Tesla revealed that its energy storage Gigafactory in Shanghai is continuing to ramp up production capacity.
Since SpaceX went public in June, there has been widespread speculation that Elon Musk would push for a merger between the two companies.
On July 31, Tesla China told the China Fund News reporter that the market rumors about Tesla planning to spin off its China business were untrue.
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