The electric vehicle maker might be cutting ties with China ahead of a possible union with Musk's space exploration company.
Tesla is reportedly considering cleaving off its entire business in China to grease the wheels of a merger with SpaceX, according to the Wall Street Journal. The newspaper reports that “some Tesla executives have been told to prepare for a separation of the China business,” which could include a “spinoff, sale or closure.”
The company reportedly would be able to do this fairly quickly because CEO Elon Musk had already tasked executives to prepare for a split in the event that Beijing invades Taiwan.
Tesla's China business has been a significant contributor to the company's revenue, with the country being one of the largest markets for electric vehicles. The company has multiple manufacturing facilities, research centers, and sales offices across the country.
It's worth noting that Tesla has faced challenges in China in recent years, including increased competition from local electric vehicle makers and regulatory hurdles. The company has also been subject to investigations and fines by Chinese authorities.
The Wall Street Journal report suggests that Tesla is considering a sale or spinoff of its China business due to concerns that Beijing may impose stricter regulations or even seize the company's assets in the event of a conflict with Taiwan.
Elon Musk has been vocal about his concerns regarding the potential conflict between the US and China, and has spoken out in support of Taiwan's sovereignty. However, the exact reasons behind Tesla's decision to sell or spin off its China business remain unclear.
Some industry analysts have pointed out that a sale or spinoff of Tesla's China business could be a strategic move to avoid potential risks, but others have warned that it could also signal a decline in the company's commitment to the Chinese market.
The news comes as Tesla is preparing for a merger with SpaceX, which has been valued at over $200 billion. The deal is expected to be one of the largest in the history of the tech industry.
Elon Musk has not publicly commented on the report, but the news has sent shares of Tesla soaring.
A spokesperson for Tesla declined to comment on the report, citing company policy.
The Wall Street Journal report has caused concern among investors and analysts, who are worried about the potential impact on Tesla's stock price and overall business strategy.