July 31, 2026 – Rumors suggesting that Tesla could divest or spin off its China operations have been firmly rejected by CEO Elon Musk, who described the claims as entirely false shortly after they gained traction across financial markets.
The speculation, first reported by The Wall Street Journal citing people familiar with the matter, alleged that Tesla had explored the possibility of separating its China business. The report further fueled market discussion that such a move could potentially pave the way for a future merger between Tesla and SpaceX.
Musk quickly responded through his social media account, dismissing the report outright. He stated that the claims had no factual basis and characterized the story as misinformation.
China remains one of Tesla’s most strategically important markets, with the Shanghai Gigafactory serving as the company’s largest vehicle production site and primary export hub worldwide. Beyond manufacturing, the country is also a critical source of consumer demand, making it a cornerstone of Tesla’s global business strategy.
According to Tesla’s official figures, the Shanghai facility is responsible for delivering more than half of the company’s worldwide orders, underscoring its central role in the automaker’s supply chain and international operations.
Recent delivery data further highlights the factory’s significance. During the first half of 2026, Tesla delivered more than 830,000 vehicles globally, while the Shanghai Gigafactory accounted for nearly 468,000 units. That represented a 28.4% year-over-year increase and marked the plant’s strongest first-half production performance in nearly three years.
Since handing over the first China-made Model 3 to customers in December 2019, the Shanghai Gigafactory has produced more than 4.5 million electric vehicles over the past six and a half years. The facility now contributes over 45% of Tesla’s cumulative global output, reinforcing its position as the company’s largest manufacturing and export center worldwide.
