As reported by The Wall Street Journal on Thursday evening, Tesla executives were instructed to prepare plans to sell or spin off the China division to reduce regulatory obstacles to a merger with SpaceX.
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Tesla’s large-scale operations in China, including an electric vehicle factory and a battery pack “Megapack” factory, are a major obstacle to any potential merger. SpaceX is a major contractor important from a national security perspective, so Tesla’s ties with China literally derail the deal.
A potential Tesla and SpaceX merger would likely also face serious scrutiny from Beijing.
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The Wall Street Journal reported that E. Musk founded Tesla China to ensure an easy separation to protect against US and China geopolitical tensions.
E. Musk called such talks “fake news.” “It was never even discussed. Absurd fake news. People should treat the news as fake until proven otherwise,” he wrote on the social network X.
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