Why does Musk find it difficult to "decouple" from China?

According to a report from the Hong Kong South China Morning Post on July 31, Elon Musk denied a media report claiming that Tesla was considering selling its business in China. Musk, who is the CEO of Tesla and SpaceX, wrote on the platform X on July 31: This has never been discussed. Ridiculous fake news. Before this statement from the worlds richest man, the Wall Street Journal reported that Tesla was considering separating its Chinese operations from its global business ahead of an anticipated merger with SpaceX, which could ultimately lead to the sale or closure of its Shanghai Gigafactory. The Wall Street Journal cited unnamed sources saying that Musk aims to restructure Tesla with laser precision to address potential conflicts of interest arising from SpaceX's position as a major U.S. defense contractor amid tense U.S.-China relations. Analysts believe that it would be difficult for Tesla to divest its Shanghai assembly plant. Cars assembled in Shanghai account for 52% of Tesla's total deliveries to global customers in 2025. China is Tesla's second-largest market globally, following the U.S. Independent analyst Gao Shen, based in Shanghai, stated: Given the role of the Shanghai plant and China's strong electric vehicle supply chain, any potential plan to divest Tesla's business in China is economically unfeasible. He said, Today, Tesla remains the global leader in the electric vehicle sector, even though its Chinese competitors are rapidly growing in both domestic and foreign markets. Tesla Vice President Tao Lin said last year that Tesla's Shanghai Gigafactory has over 400 Chinese suppliers, more than 60 of which also supply parts to Teslas factories overseas. She also noted that over 95% of the parts for the Model 3 and Model Y produced in Shanghai are provided by Chinese suppliers.