Earlier this week, Gerber Kawasaki CEO Ross Gerber weighed in on reports that Tesla Inc. (NASDAQ:TSLA) could explore separating its China operations amid discussions about a possible merger with Elon Musk’s Space Exploration Technologies Corp. (NASDAQ:SPCX).
Gerber Says Tesla ‘Needs Tesla China’
"This Tesla China issue is no good for Tesla either. Tesla needs Tesla China," Gerber wrote on X.
He suggested Tesla could shift its autonomous-driving and robotics ambitions to SpaceX, adding, "Maybe Tesla should sell the robots and cabs to SpaceX and let Tesla be an EV company again."
Gerber’s comments came after The Wall Street Journal reported that Tesla advisers had discussed potential options for its China business, including a spinoff, sale or closure.
The report said the plans remained uncertain and could change.
Musk rejected the report, writing on X, "This has never even come up in a discussion ever. Absurdly fake news."
Tesla’s China Business Remains Critical
China is central to Tesla’s global operations. Its Shanghai Gigafactory is the company’s largest and most productive manufacturing facility, supplying vehicles to Chinese buyers and serving as a major export hub for Europe, Canada and the Asia-Pacific region.
Tesla’s China operations also benefit from an extensive local supply chain. The company has said it sources more than 95% of the components used in China-made Model 3 and refreshed Model Y vehicles locally.
The country is Tesla’s second-largest market after the U.S., although the automaker faces growing competition from domestic EV companies, including BYD (OTC:BYDDF).
SpaceX Merger Could Create Challenges
A Tesla-SpaceX merger could face geopolitical and regulatory hurdles because SpaceX is a major U.S. defense contractor with national security and satellite operations.
SpaceX priced its IPO at $135 per share on June 12, raising $75 billion and valuing the company at roughly $1.75 trillion. The stock later surged to $225.64 before slipping below its IPO price, handing short sellers an estimated $15.5 billion in paper gains by July 23.
Musk recently declined to rule out combining Tesla and SpaceX, saying the companies’ businesses are becoming increasingly interconnected.
Meanwhile, Tesla continues to expand its robotaxi business. In July, Bank of America maintained a Buy rating and a $460 price target, citing the company’s growing autonomous vehicle fleet and expansion into additional markets.
FCC Ban Raises Risks for Tesla’s China Business
During its second-quarter earnings call, Tesla said it is installing its first-generation Optimus production lines ahead of planned manufacturing in 2026, adding that production will begin "soon."
Tesla’s China business could face added pressure after the Federal Communications Commission moved to bar foreign humanoid robots from entering the U.S. market over security concerns.
Beijing criticized the decision and warned of possible retaliation, including restrictions on rare earth supplies and broader limits on U.S. companies’ access to the Chinese market — measures that could disrupt Tesla’s Optimus production in California.
SpaceX Earnings: Data Center Deals Fuel Growth
Meanwhile, SpaceX will report its first earnings as a public company on Tuesday. Analysts expect $6.8 billion in revenue, with estimates as high as $8 billion.
Full-year revenue is projected to reach $39.1 billion and climb to $73.1 billion next year.
Its data center business is expected to drive much of that growth. Anthropic is paying SpaceX $1.25 billion per month under a $45 billion deal, while Reflection AI contributes $125 million per month. Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) is expected to pay more than $900 million a month.
Price Action: SpaceX shares closed at $108.37, down 3.41% on Friday, according to Benzinga Pro.
According to Benzinga Edge Stock Rankings, SpaceX shares remain in a bearish trend across the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Walter Cicchetti on Shutterstock.com
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