Is Tesla Really Selling Gigafactory Shanghai? Elon Musk Says No

Elon Musk dismissed rumors that Tesla plans to sell its Gigafactory Shanghai plant, calling the claims fake news on Friday.

Musk’s denial followed a Wall Street Journal report on a possible split of Tesla’s China business. That report tied the move to a possible merger between Tesla and SpaceX.

What Musk Is Actually Denying

The rumor began after an X user suggested directly to Musk that Tesla was preparing to offload the plant. Musk’s reply, posted early Friday morning, called the report absurdly fake news and urged people to assume breaking news is false until proven otherwise.

This has never even come up in a discussion ever. Absurdly fake news. People should assume news is fake until proven otherwise.

— Elon Musk (@elonmusk) July 31, 2026

The Journal’s report did not name Gigafactory Shanghai directly. Instead, it said Tesla advisers had weighed a spin-off, a sale, or a closure of the automaker’s Chinese operations, options Musk has not addressed beyond his blanket denial.

Gigafactory Shanghai remains Tesla’s largest plant, with annual capacity above 950,000 vehicles, and it historically accounts for more than half of the company’s global deliveries.

Gigafactory Shanghai exports vehicles across Europe, Canada, and the Asia-Pacific region. However, Musk’s denial landed during a rough stretch for Tesla stock, which suffered its worst week since 2022 after mixed second-quarter results.

Why the SpaceX Merger Talk Persists

The China business rumor did not emerge in isolation. Wolfe Research has already framed a Tesla and SpaceX merger as a core investor thesis, a pairing Musk has never firmly ruled out. That view follows SpaceX’s record initial public offering, which raised $75 billion in June and valued the rocket company at $1.75 trillion.

Musk has separately argued that SpaceX could outvalue Earth itself. That claim underscores how central the rocket company has become to his broader ambitions. Ark Invest’s Cathie Wood disclosed a $529 million rotation from Tesla into SpaceX shares this month, citing similar merger logic.

Musk also has a track record of terse denials moving markets. He used a similar two-word denial to knock down another SpaceX rumor just weeks earlier. That pattern is why commentators like Whole Mars Catalog urged outlets not to delete their posts after a denial. Keeping the original post visible, they argued, helps the public track exactly what Musk is rejecting.

Tesla’s second-quarter earnings showed revenue climbing to $28.24 billion, even as margins narrowed to 16.8%. That gap adds financial pressure that could fuel more reorganization speculation regardless of Musk’s denial. For now, his post stands as the only official word from either company, and investors will likely keep testing that line as merger chatter builds through the rest of 2026.