Elon Musk called China "awesome" on Monday as questions over Tesla Inc.’s (NASDAQ:TSLA) operations in the region continued to feature in speculation around a potential merger with Space Exploration Technologies Corp (NASDAQ:SPCX).
Tesla China Merger Hurdle
The CEO of Tesla and SpaceX was responding to an episode of The Brainstorm, a weekly podcast by Cathie Wood-led ARK Invest’s with Sam Korus, Brett Winton and Nick Grous discussing whether Tesla’s China operations could complicate a potential merger between Tesla and SpaceX.
“China is awesome. I strongly encourage people to visit,” Musk said in a post on X.
The investors said Tesla’s Shanghai factory could create complications because SpaceX has significant U.S. national security-related business and some technologies face restrictions when entering China.
“I don’t see it as a stumbling block because there are probably ways to ring-fence the Chinese assets,” Winton said.
The Shanghai facility remains an important manufacturing and export base, although the investors added that China is becoming less central to Tesla’s future value as the company shifts toward robotaxis and other businesses.
ARK Sees Merger Before Year-End
Ark also said the China issue appeared manageable rather than an “insurmountable hurdle” to a merger, with a possibility of a deal being announced before the end of 2026.
Any transaction would still require negotiations over the price of Tesla shares, shareholder approval and other regulatory considerations.
In July, Musk dismissed a Wall Street Journal report that the EV maker was considering selling its China business to clear the way for a potential SpaceX merger.
SpaceX and Tesla Already Share More Than Ownership
SpaceX disclosed that it purchased $295 million of Tesla Megapack batteries in the second quarter, bringing its first-half purchases to $329 million and adding another significant related-party transaction between Musk’s companies.
The transactions add to the financial and operational links between Tesla and SpaceX, which also include Tesla’s $2 billion investment in xAI before that stake was converted into SpaceX equity.
SpaceX IPO Makes Tesla Merger More Practical
The potential Tesla-SpaceX combination gained financial momentum after SpaceX’s public debut, with JPMorgan saying the company’s roughly $2.2 trillion valuation could provide an acquisition currency for an all-stock deal.
Price Action: TSLA closed 0.7% higher on Monday at $330.88 and fell 0.19% in extended trading.
Benzinga edge rankings indicate TSLA has a Momentum score in the 10th percentile and a Growth score in the 40th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Frederic Legrand – COMEO on Shutterstock.com
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