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Tesla Explores China Business Spinoff Amid SpaceX Merger Talk, WSJ Reports
Tesla Inc. (NASDAQ:TSLA) is internally discussing a potential separation of its China business as CEO Elon Musk weighs a merger with his aerospace venture, SpaceX, according to a report from The Wall Street Journal.
Following the report, shares of Tesla rose 2.3% in aftermarket trading on Thursday.
Separation Options Explored
The Wall Street Journal, citing people familiar with the matter, reported that some Tesla executives have been instructed to prepare for a potential separation of the company's China operations. Advisers have reportedly discussed several options, including a spinoff, a sale, or a complete closure of the business unit.
The timeline for any potential move remains unclear, and the report noted that the plans could change. The discussions represent a significant strategic consideration for the electric vehicle maker, for which China is a critical market for both production and sales.
AdContext of a Potential SpaceX Merger
The internal deliberations are occurring amid growing speculation about a potential merger between Tesla and SpaceX, two of Musk's most prominent companies. During Tesla’s recent earnings call, Musk responded positively to the idea but did not make any firm commitments.
"Obviously we can’t talk about, you know, combining companies and that kind of thing on earnings calls… It has got to be done with the appropriate process," Musk told investors and analysts. Musk has a history of merging his ventures, having previously integrated solar panel company SolarCity into Tesla in 2016 and, more recently, folding his artificial intelligence firm xAI into SpaceX.
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