BREAKING: Elon Musk Denies Tesla’s China Unit Sale for Potential SpaceX Merger

Elon Musk has rejected a Wall Street Journal report claiming Tesla is considering selling or spinning off its China business for a potential merger with SpaceX, labeling the story “fake news.” Tesla’s China unit has also dismissed the claims as false.

Elon Musk Calls WSJ Report on Tesla China Unit as “Fake News”

The Wall Street Journal reported that Tesla could sell or spin off its China business to pave the way for the potential SpaceX merger. It claimed executives have been told to prepare for the separation of its China business, according to people familiar with the matter.

Elon Musk responded directly on X, posting “This is fake news.” He also denied any discussions over selling or spinning off Tesla’s China business, calling it “Absurdly fake news.”

Tesla China separately told a reporter from The Paper that the report is “false information.” The WSJ’s report centered on geopolitical risks and SpaceX’s status as a major U.S. defense contractor.

Notably, the Shanghai Gigafactory remains one of Tesla’s most important production plants globally, serving as its key export hub for Europe, Canada and the Asia-Pacific region. China itself is Tesla’s second-largest market globally after the United States.

SpaceX Merger Speculation

Speculation over a potential merger of Tesla and SpaceX has grown in recent months. Also, Elon Musk kept merger speculation alive during a Tesla quarterly earnings call, highlighting growing overlap between the firms.

The increasing technological overlap between the companies, particularly around artificial intelligence and manufacturing, has kept the market speculating about a Tesla-SpaceX merger.

In addition, participants on prediction markets like Kalshi have assigned high-probability odds to a combination of the two companies occurring by mid-2027. Kalshi data shows a 49% odds of a merger between Tesla and SpaceX before May 2027.

TSLA stock closed 3.53% higher at $308.85 on Thursday. SpaceX (SPCX) stock closed 0.31% lower at $112.20 amid AI spending rout. SPCX stock has dropped to its lowest closing price in history and has now lost more than 50% of its value since June’s all-time high.

To track similar high-profile corporate outcomes and tech mergers, traders often turn to the best crypto prediction markets to trade on real-time probabilities.