Gerber suggests Tesla sell robots to SpaceX, refocus on EVs
Gerber Kawasaki CEO Ross Gerber proposes Tesla sell robotics and cabs to SpaceX to mitigate China risks. Musk denies WSJ reports of a China business sale or merger planning. SpaceX IPO context and regulatory bans on robots add complexity.
*this image is generated using AI for illustrative purposes only.
Gerber Kawasaki CEO Ross Gerber proposed on July 31, 2026, that Tesla Inc. could resolve its China operational challenges by selling its robotics and autonomous vehicle units to Space Exploration Technologies Corp. Gerber’s suggestion emerged after a Wall Street Journal report alleged Tesla was weighing the sale of its Chinese business to facilitate a potential merger with SpaceX. Tesla CEO Elon Musk immediately dismissed the report as "absurdly fake news," stating the separation had never been discussed internally. Despite the denial, Gerber argued that offloading non-EV assets would allow Tesla to remain an electric vehicle company while addressing geopolitical sensitivities surrounding its Shanghai Gigafactory.
The Wall Street Journal cited anonymous sources claiming Tesla executives were preparing for a potential spinoff, closure, or sale of its China unit. Musk rejected these claims on social media, emphasizing that the Chinese operation remains integral to Tesla’s strategy. The Shanghai Gigafactory is Tesla’s largest manufacturing facility, supplying vehicles to domestic buyers and serving as an export hub for Europe, Canada, and Asia-Pacific. Tesla sources more than 95% of components for its Model 3 and Model Y vehicles locally in China, reinforcing the region’s strategic importance despite growing competition from domestic rivals like BYD.
Analyst Perspective on Structural Risks
Gerber highlighted that the "Tesla China issue" poses ongoing risks due to geopolitical tensions. He suggested that transferring autonomous driving and robotics ambitions to SpaceX might mitigate regulatory headwinds. This perspective aligns with broader market speculation about a Tesla-SpaceX merger, which Musk has not ruled out, noting the companies’ businesses are becoming increasingly interconnected. However, such a merger faces significant hurdles given SpaceX’s role as a major U.S. defense contractor with national security implications.
SpaceX recently completed its initial public offering on June 12, pricing shares at $135 per share and raising $75 billion, valuing the company at roughly $1.75 trillion. The stock surged to $225.64 before slipping below its IPO price by July 23, generating estimated paper gains of $15.5 billion for short sellers. SpaceX is scheduled to report its first earnings as a public company on Tuesday, with analysts projecting revenue between $6.8 billion and $8 billion. Full-year revenue estimates stand at $39.1 billion, climbing to $73.1 billion next year, driven largely by data center deals with Anthropic, Reflection AI, and Alphabet Inc.
Regulatory Pressures on Robotics
Beyond merger speculation, Tesla faces external regulatory pressures involving its robotics division. The Federal Communications Commission imposed a ban on foreign humanoid robots entering the U.S. market over security concerns. Beijing criticized this move, warning it could harm trade relations and threatening retaliatory measures, including restrictions on rare earth mineral supplies. These tensions could disrupt Tesla’s Optimus humanoid robot production in California, which relies on global supply chains. During its second-quarter earnings call, Tesla confirmed it is installing first-generation Optimus production lines ahead of planned manufacturing in 2026.
What the Numbers Show
The divergence between Musk’s denial of any sale discussions and Gerber’s structural proposal highlights investor sensitivity to geopolitical risks in China. While Tesla’s operational integration in China remains strong—with high local sourcing rates and export volumes—the potential for regulatory retaliation creates uncertainty. The immediate market reaction to Musk’s denial saw Tesla shares rise 1.90% to $314.72, suggesting investors viewed the clarification as stabilizing. However, the lack of a definitive long-term strategy for managing U.S.-China tech tensions leaves the company exposed to future policy shifts, particularly regarding its robotics and autonomous vehicle ambitions.
How might SpaceX's upcoming earnings report and its valuation volatility influence investor sentiment regarding the feasibility of a Tesla-SpaceX merger?
What specific retaliatory measures could Beijing implement regarding rare earth mineral exports if U.S. restrictions on humanoid robots persist, and how would this impact Tesla's Optimus production timeline?
Given the FCC's ban on foreign humanoid robots, will Tesla be forced to restructure its robotics supply chain or localize production entirely within the U.S. to maintain market access?
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