Tesla may sell or spin off Tesla's China business, its second-largest market, amid growing geopolitical concerns. The automaker’s strategy allows the U.S. and China operations to remain separateોર, a design that Elon Musk insisted upon to safeguard the U.S. side should tensions flare.

Musk has instructed Tesla executives to keep a "laser" between the U.S. and China divisions, ensuring that, if geopolitical strife erupts, the U.S. arm can survive independently. Executives are now being asked to prepare for a potential separation of the China business ahead of a possible merger with SpaceX.

Tesla advisers have explored options such as a spinoff, sale, or closure. Any of these moves could drastically affect Tesla’s valuation, as its Chinese operations have been the backbone of its global profitability and a key driver of its mass‑market electric‑vehicle dominance.