Tesla-SpaceX merger faces US-China regulatory hurdles

Elon Musk's proposed Tesla-SpaceX merger faces significant regulatory hurdles in the US and China over national security and technology-sharing concerns. Tesla's reliance on Chinese manufacturing and SpaceX's defense contracts create conflicting pressures. Analysts suggest a firewall around Tesla's Chinese operations to block data flow, though Beijing may use the merger as leverage for concessions like technology access. Divestment options include spinoffs or sales, but finding buyers is complicated by industry cash constraints. Tesla's Shanghai plant produces over half its global output, making a clean break difficult. Some investors believe the China business is small enough to scale back if regulators object, despite its importance for funding future ventures.