- Elon Musk called The Wall Street Journal’s report about selling or spinning off Tesla China “fake news.”
- Tesla denied any internal plans to separate or sell its China operations and labeled the report false.
- Tesla China remains strategically vital, contributing about 18% of Tesla’s global revenue.
On July 31, a report related to Tesla triggered widespread discussion in both China and overseas markets.
According to an exclusive report by The Wall Street Journal, citing anonymous sources familiar with the matter, Tesla was reportedly discussing contingency plans that could potentially lead to a “separation” of its China operations.
“Separation” remains a broad and ambiguous term. The Wall Street Journal detailed three options reportedly prepared by Tesla’s advisory team: spinning off the China business, selling it, or shutting down operations in China.
The report also claimed that Tesla executives had been asked to “prepare for possible changes,” while emphasizing that discussions surrounding Tesla China were still at an early stage and there was no confirmed timeline for any action.
Given the strategic importance of Tesla China — the report noted that revenue from the Chinese market accounts for 18% of Tesla’s global revenue, making China the company’s second-largest single market — the authenticity of the report quickly became a major topic of discussion among industry observers.
After ChinaEV Home contacted relevant Tesla China insiders, the response received was clear: the report was “false information.”
By noon, Elon Musk directly responded on social media, calling The Wall Street Journal report “fake news.”
His denial was comprehensive, rejecting not only the possibility of selling Tesla China but also claims that such discussions had ever taken place internally.
Around the same time, Tesla Global Vice President Grace Tao posted on Weibo that “false information (rumors) represents a major global risk,” which was widely interpreted as a response to speculation over a possible Tesla China sale.
The “dramatic” report appears to have reached a temporary conclusion.
A brief review of the events shows that The Wall Street Journal claimed, based on anonymous sources, that Musk was considering how to handle Tesla China due to potential political scrutiny during a possible merger between Tesla and SpaceX.
According to the report, Tesla China could become a potential factor affecting such a transaction.
The report also stated that the advisory team had proposed several possible measures:
- Creating organizational and system-level separation between Tesla China operations and other business units to reduce potential risks;
- Establishing a separate entity to manage exports from the Shanghai Gigafactory;
- Separating employee access permissions and internal office systems.
However, following Musk’s strong denial, these speculations have largely lost their significance.
Musk has indeed previously discussed the possibility of combining Tesla and SpaceX, but considering the numerous regulatory, political and operational complexities involved, no clear timeline for such a move is expected in the near term.
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