Tesla reportedly might sell its China business ahead of a SpaceX merger

The Wall Street Journal says Tesla has asked some executives to prepare options for separating its China business, including a spinoff, sale, or shutdown.

The move is reportedly tied to plans that could make Tesla easier to combine with SpaceX, which faces security and citizenship constraints as a defense contractor.

China is central to Tesla’s revenue and manufacturing network, so any separation would be a major strategic shift.

The split could also reduce China-related security and regulatory complications that might stand in the way of a Tesla-SpaceX deal.