Elon Musk Dismisses Report Tesla Could Sell Chinese Business for SpaceX Merger: 'Absurdly Fake News'

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Tesla Inc. 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.. 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. Don't Miss: A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why Still Learning the Market? These 50 Must-Know Terms Can Help You Catch Up Fast 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. Absurdly fake news. People should assume news is fake until proven otherwise. — Elon Musk (@elonmusk) July 31, 2026 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. Trending: Avoid the #1 Investing Mistake: How Your 'Safe' Holdings Could Be Costing You Big Time 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.