Musk Calls Report of a Tesla-SpaceX Merger Prep "Absurdly Fake News"

Keypoints:

• • The Wall Street Journal reported Tesla had been preparing to separate its China business
  • The move would reportedly clear a path toward an eventual SpaceX merger
  • Elon Musk denied it directly on X, calling it "fake news" twice
  • Tesla's China unit separately denied the report too
  • Prediction market Kalshi still shows 49% odds of a Tesla-SpaceX merger before May 2027

A Wall Street Journal report claimed Tesla had quietly been preparing options to separate its China business, including a possible spinoff, sale, or closure, a move that would reportedly clear a major obstacle standing between the company and a potential future merger with SpaceX. 

The reasoning made sense on paper. SpaceX is a major U.S. defense contractor, and merging it with a company holding significant Chinese operations could invite serious regulatory scrutiny over its classified satellite and defense work.

Elon Musk wasn't having any of it. "This has never even come up in a discussion ever," he wrote on X, calling the report "absurdly fake news" in a separate post the same evening. Tesla's China unit backed him up independently, telling Chinese outlets including The Paper and National Business Daily that the claims amounted to false information.

The China question matters beyond just this one report, too. China made up roughly 18% of Tesla's global sales in the first half of 2026, and its Shanghai Gigafactory, unlike many competitors' China operations, isn't structured as a joint venture, which would make any separation genuinely complicated to execute. 

Musk has reportedly told executives in recent years to keep a clear line between Tesla's U.S. and China businesses regardless of merger talk, partly out of concern that rising tensions over Taiwan could threaten the company's access to chips from TSMC.

The denial hasn't fully killed the speculation, though. Musk himself kept merger chatter alive just last week, telling investors on Tesla's own earnings call that he couldn't discuss combining the two businesses in that particular setting, an answer that stopped well short of ruling it out entirely. 

Prediction market Kalshi still has the odds of an eventual Tesla-SpaceX merger sitting at 49% before May 2027, a reminder that even a flat, twice-repeated denial doesn't always settle something Wall Street already wants to believe.