1 big thing: Automakers have a China problem
The U.S. auto industry's connections to China are becoming more problematic — financially, politically or both — prompting potentially seismic shifts in corporate strategy.
Washington is applying bipartisan scrutiny to automakers that use Chinese technology or have Chinese shareholders.
Tesla is reportedly considering a sale of its China business ahead of a potential merger with SpaceX. It's unclear whether the U.S. would tolerate SpaceX, a major defense contractor, owning a significant Chinese operation — and whether China would tolerate an automaker with local operations having close ties to an American military contractor.
"Tesla advisers have discussed possible options for a separation, including a spinoff, sale or closure" of its Chinese business.
"This has never even come up in a discussion ever," Elon Musk, CEO of Tesla and SpaceX, said of the spinoff report. "Absurdly fake news."
Tesla has invested heavily in China, having built two major factories in Shanghai and pursuing authorization to run its self-driving vehicle technology there.
But competitors like Chinese EV maker BYD have become a serious threat to the company's market share in China.
Multiple foreign automakers have come under policy pressure in the U.S. due to their ties to China. Federal regulators recently banned Volvo electric vehicle spinoff Polestar from selling new vehicles in the U.S. German automaker Mercedes-Benz is concerned about a bipartisan bill in Congress that could ban it from selling vehicles in the U.S. since it has major Chinese shareholders.