Tesla Inc has held internal discussions about potentially removing its China business from the core company as CEO Elon Musk considers a merger with SpaceX, according to people familiar with the situation. Company advisers have reviewed a range of possibilities for the China unit, and some Tesla executives were told to prepare for a separation.
Those advising Tesla reportedly considered several routes for the China operations: a spinoff into an independent entity, an outright sale to a third party, or a full closure of the unit. The people who spoke on the topic emphasized that these options were among those discussed, and that plans could change.
Following the report, Tesla shares rose 2.3% in after-hours trading. The report did not provide a definitive timetable for any action, and it remained unclear how quickly a spinoff or sale could be executed.
The coverage comes amid increasing public speculation that Musk might consolidate his businesses - notably Tesla and SpaceX - under a single corporate structure. During Tesla's most recent earnings call, Musk responded in a broadly receptive manner when asked about the idea, although he declined to make any firm commitments and noted limitations on discussing such matters during an earnings call. "Obviously we can't talk about, you know, combining companies and that kind of thing on earnings calls... It is got to be done with the appropriate process," he told investors and analysts.
Observers noted that the conversation about Tesla and SpaceX joining forces has gained traction since Tesla's notable Nasdaq debut in June. The report also referenced Musk's prior corporate consolidations: earlier this year he merged xAI into SpaceX, and in 2016 he merged SolarCity into Tesla.
At present, the situation is fluid. The report underlined that preparations at Tesla for a possible China separation do not necessarily mean any decision is imminent; company priorities or circumstances could alter the course of any contemplated transaction.
Market data snippet: The report included market moves tied to the news cycle, noting Tesla shares rose 2.3% in aftermarket trade following publication of the report. The reporting also indicated a separate quoted movement for SpaceX stock.
This account is based solely on the details provided by sources familiar with Tesla's internal discussions and related public comments made on the company earnings call. It does not assert that a transaction has been approved or is underway; rather, it documents that internal planning and adviser assessments have taken place.