Why Elon Musk would find it hard to decouple Tesla from China

While the EV maker’s CEO has denied talk of a Tesla-China separation, the reports underscore mounting pressures amid broader US-China tensions

The WSJ, citing unidentified sources, said Musk wanted to reorganise Tesla with a “laser” to address potential conflicts of interest arising from SpaceX’s role as a major US defence contractor amid US-China tensions.

Technically, any sale of Tesla’s operations in the world’s second-largest economy cannot be completed unless the American company receives the green light from Chinese regulators.

Analysts said Tesla’s Shanghai assembly, which accounted for 52 per cent of its total vehicles delivered to global customers in 2025, would not be easy to dispose of. China is Tesla’s second-largest market worldwide after the US.