A Tesla/SpaceX Merger Could Create a Big Mess in China: TDS

Welcome to The Downshift, or TDS for short, The Drive’s morning news roundup bringing you the biggest automotive headlines from around the world.

The Downshift recaps news briefly, with links to full stories for those seeking more info. Here’s your bulletin for Friday, July 31, 2026.

✂️ Tesla has reportedly considered selling off its business in China because of the possibility of a merger between the EV maker and SpaceX. The latter’s military contracts mean that uniting the two companies, when one is significantly active in China, could lead to regulatory repercussions. For their part, both Tesla China and CEO Elon Musk have dismissed the report. [Wall Street Journal, CarNewsChina]

📈 Rivian just enjoyed a very solid second quarter, with revenue increasing 27% year-over-year as it outperformed Wall Street estimates. The company is now projecting to reach 70,000 deliveries by year’s end, up from 65,000, off the back of the R2’s strong launch. [Automotive News]

🏭 The earthquake that struck Japan earlier this week has caused manufacturing pauses at Toyota, Nissan, Mitsubishi, and Daihatsu facilities, as well as at a Honda motorcycle plant, as key suppliers including Renesas and Aisin work through disruptions. These stoppages are generally expected to last through the first week of August. [Automotive News]

🌏 Ford CEO Jim Farley told staff in a company town hall that the automaker expects Chinese makes to enter the U.S. market in five to 10 years, despite numerous laws in the making to prevent their entry. [Automotive News]

🚖 NHTSA has granted Zoox approval for limited commercial deployment of its steering-wheel-free robotaxis. This means the company may begin charging for rides with these cars, and that’s slated to begin first in Las Vegas before rolling out to other cities. [Reuters]

⚡ 22% of new-car buyers in California took home hybrids during the first-half of 2026, compared to 16% that bought battery EVs, according to new data. [Automotive News]

🏁 Weekend races to watch (all times Eastern):

• WRC Rally Finland: All weekend long on Rally.TV
• Supercars Championship at Perth (Race 1): Saturday at 12:20 a.m. on Racer Network
• Formula Drift Pro Class Top 16 at Indianapolis: Saturday at 7 p.m. via livestream
• IMSA SportsCar 6 Hours of Road America: Sunday at 11:30 a.m. on Peacock

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