Elon Musk denies claims that Tesla could sell off its China business

Elon Musk is refuting claims that Tesla (TSLA) is considering a spin-off of its China business ahead of a rumored merger between the EV maker and SpaceX (SPCX). This comes after the Wall Street Journal's initial reporting on the subject.

Yahoo Finance Senior Autos Reporter Pras Subramanian reacts to Musk's latest comments.

Video Transcript

00:00 Speaker A

Elon Musk is dismissing reports from the Wall Street Journal that Tesla is preparing to offload its China business ahead of a potential merger with SpaceX. For more on this, we're going to have bring in Yahoo Finance's Pras Subramanian. Uh, Pras, so let's just dig into this. Musk is pushing back, I guess, after this report claims Tesla's explored separating or or even selling its China business.

00:19 Speaker A

Musk says absurdly fake news. That's what this is, Pras. What I what are investors supposed to make of all this?

00:27 Pras Subramanian

I mean, I think investors should take this seriously. This report, I think there's definitely smoke there where you know, when there's fire. You know, the Journal saying that that executives at Tesla and places were trying to decide how to dispose of that China business in the event of a merger because, you know, SpaceX's government contracts, right? If they merge, they'd become part of SpaceX. Those government contracts are a concern for the Chinese government.

00:46 Pras Subramanian

So, you know, Tesla's Chinese business is and their manufacturing arm, the Giga Giga Shanghai is extremely successful. It's where they export not not just cars out of the country, but also they build cars for for the country. You know, how do you structure a Tesla SpaceX sort of combined entity if you have to spin out that that China business? I think that's why it's a it's a big concern there if this is going to happen.

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