Talk is growing of a Tesla-SpaceX merger. Will geopolitics throw a spanner in the works?

In FocusTalk is growing of a Tesla-SpaceX merger. Will geopolitics throw a spanner in the works?

Security concerns in Beijing and Washington could create ‘bottleneck’ if Elon Musk attempts to combine the two flagship companies

One by one, Tesla Model Y Ls roll out of the company’s end-of-line inspection bays, gleaming in black, white and gold. They are a mix of left-hand and right-hand drive – one of many signs the electric vehicles (EVs) produced here are destined for ports around the world.

The company touts a total assembly time of less than 40 seconds at its sprawling Gigafactory in Lingang, a coastal area on the far southeastern edge of Shanghai. From there, Tesla says, a finished car can reach the port and be loaded onto a ship within an hour.

While his EV business relies heavily on China’s supply chain to fulfil global demand, Musk’s commercial aerospace company SpaceX has become a core national security contractor for the Pentagon.

Musk must perform a balancing act between the competing interests, which would require a complicated, ring-fenced strategy for his China operations to satisfy regulators in both Washington and Beijing, according to industry observers.