Why Elon Musk would find it hard to decouple Tesla from China
Elon Musk has dismissed a media report claiming electric vehicle (EV) company Tesla is considering selling its China business, even as the speculation threatens to renew scrutiny over the American carmaker’s dependence on its main manufacturing hub in Shanghai. “This has never even come up in a discussion ever,” Musk, who is CEO of both Tesla and commercial aerospace giant SpaceX, posted on his X…
Elon Musk has firmly denied reports that Tesla is considering selling its China operations, dismissing the claim as "absurdly fake news." This comes after the Wall Street Journal (WSJ) reported speculation that Tesla might separate its China business ahead of a potential merger with SpaceX. The WSJ cited unnamed sources who suggested that Musk wanted to reorganize Tesla to address potential conflicts of interest due to SpaceX's significant role in US defense contracting amidst US-China tensions.
However, Musk stated on his X social media platform that such a discussion never occurred. Analysts agree that Tesla's Shanghai assembly, which produces 52% of its vehicles globally in 2025, would be challenging and economically unviable to part with due to its pivotal role in the company's supply chain and China's status as its second-largest market.
Tesla's vice-president of external relations in China, Grace Tao, emphasized that the Shanghai Gigafactory relies heavily on more than 400 domestic suppliers, with over 60 also supplying components to other Tesla plants abroad. This underscores Tesla's dependence on its Chinese manufacturing hub, with over 95% of parts used in its Shanghai-produced Model 3 and Model Y vehicles sourced from local vendors.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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