In late July, foreign media cited multiple supply chain sources, reporting that SpaceX is further strengthening its global supply chain management. The company requires that suppliers must not assign Chinese employees to facilities producing products for SpaceX, nor use systems and equipment manufactured by Chinese enterprises, and is building a so-called "NCNT (Non-China, Non-Taiwan) supply chain."
This is not the first time SpaceX has sent similar signals this year. As early as June this year, when SpaceX launched its IPO, media reports indicated that SpaceX required its underwriters not to accept subscription orders from investors in mainland China and Hong Kong. Meanwhile, the SpaceX website and IPO roadshow materials were also inaccessible in mainland China and Hong Kong.
Combining these two pieces of news, many have interpreted it as SpaceX further "decoupling" from China. However, looking at its actions over the past few years, this looks more like a political statement by Musk, leveraging the IPO and U.S. national security issues, rather than a genuine major overhaul of the supply chain.
SpaceX's Primary Identity Is No Longer a Commercial Company
Reports show that one of the key focuses of SpaceX's recent actions is to inspect whether supplier factories have managers, employees, or executives from China. If so, SpaceX requires suppliers to reassign these personnel away from all facilities and projects supplying SpaceX. This requirement applies even if the factory is geographically located outside China. SpaceX has taken a very tough stance this time, warning that suppliers who fail to comply will face termination of future cooperation.
Multiple industry management professionals described how SpaceX scrutinizes its suppliers in meticulous detail, including inspecting the surveillance systems and network equipment in factory facilities. Any equipment from Hikvision, T&W, or other Chinese companies must be replaced.
From reviewing employee identities to inspecting factory surveillance systems and network equipment, SpaceX's focus this time extends beyond the products themselves to whether potential risks exist in the entire production environment.
These auditing requirements stem from the role SpaceX undertakes, rather than its identity as a commercial company. Today, it is hard to define SpaceX as an ordinary commercial space company. It undertakes NASA's crewed space missions, the Artemis lunar landing program, and related projects, and also handles a large number of launch missions for the U.S. Department of Defense and intelligence agencies.
Last Wednesday, the U.S. Space Force awarded SpaceX a $1.6 billion contract for 18 U.S. national security launch missions to deploy military satellites for missile warning and target detection. Year-to-date alone, the value of U.S. defense-related contracts awarded to SpaceX has reached approximately $7 billion.
For such an enterprise, supply chain management is no longer just a commercial issue, but a national security one. For U.S. military technology, "decoupling from China" itself is not a new proposition. From chips and communication equipment to critical software and data systems, and further to supply chain security, the U.S. government has been continuously strengthening relevant restrictions in recent years. Commercial enterprises undertaking national security work are also increasingly required to manage their supply chains according to the standards of the military-industrial system.
A Political Performance by Musk
Aerospace experts told Ke Gong Li Liang that SpaceX itself does not really need Chinese engineers and supply chains at present. The reason Musk brings this matter into the public eye now is more of a political statement.
The reason is not complicated. The isolation of the aerospace industries between China and the U.S. did not start today. Since the late 1990s, cooperation between the two countries in the aerospace field has been continuously shrinking, and the U.S. aerospace industry has gradually formed a relatively independent supply system. For SpaceX, which undertakes a large amount of national security work, its Tier 1 suppliers have long been subject to high standards. Eliminating Chinese suppliers and Chinese engineers is something that has been done for a long time.
SpaceX was already preparing for today three years ago. In March 2023, SpaceX required some Taiwanese suppliers to relocate their production bases outside Taiwan. Subsequently, suppliers such as WNC and Tripod Technology accelerated their capacity deployment in Vietnam, Thailand, and other places.
In other words, the new requirements proposed by SpaceX at this time node do not completely establish a new set of supply chain rules, but rather look more like making the originally implemented regulations public and institutionalized. For a listed company that has just completed its IPO, this is not only a signal to the capital market that supply chain risks are controllable, but also further proof to the U.S. government that its supply chain management can meet national security requirements. Rather than a strategic adjustment, it is more like a political performance by Musk.
Therefore, in the view of experts, this move will not have a significant impact on SpaceX's own operations in the short term, nor will it change the position of the Chinese supply chain in the global industrial chain.
What is truly worth continuous attention in this news is whether SpaceX will further expand this rule in the future. If similar requirements continue to extend to Tier 2 and Tier 3 suppliers, or even expand from the aerospace field to more industries, the nature of the matter will change.
The reason is that Tier 1 suppliers usually cooperate directly with SpaceX, with relatively clear management boundaries and relatively controllable execution costs. However, the further upstream it extends, the more enterprises are involved in the supply chain and the more complex the hierarchy. Many key components, raw materials, and production equipment have long been deeply embedded in the global division of labor system, and many of these links are connected to the Chinese supply chain.
Under these circumstances, the so-called "decoupling from China" will no longer just mean adjusting cooperation targets and replacing individual equipment, but will mean reorganizing and reconstructing the entire supply chain system. This is no longer a management issue, but an industrial one. Currently, this tendency to expand is relatively small. Experts point out that Musk still has many other industries in China, and doing so would not be beneficial to him.
Why SpaceX Can, but Tesla Cannot
If we broaden the perspective, we will find that SpaceX's "decoupling from China" this time actually has strong industry specificity. A typical example is Tesla, another enterprise under Musk.
On July 31, news emerged that Tesla was going to divest its Chinese business, claiming that Tesla consultants had discussed possible spin-off plans, including spinning off, selling, or closing it, to pave the way for a potential merger with SpaceX. However, this news was subsequently debunked by Musk himself.
The Shanghai Gigafactory has an annual production capacity of over 950,000 vehicles, accounting for more than half of Tesla's global vehicle deliveries. It is Tesla's largest and most efficient production base globally, as well as an important hub for its global exports. It has over 400 local suppliers, of which more than 60 have entered Tesla's global supply chain. For Tesla, China is not only an important market but also one of the most efficient and comprehensively supported manufacturing systems in the world.
If Tesla were to truly divest its Chinese business, it would face not only factory relocation costs but also a comprehensive reconstruction of industrial supporting facilities, engineering capabilities, and supply chain efficiency. It would also face a shrinkage of 17.5% of its revenue from China. Most importantly, rapidly growing companies like BYD and Xiaomi have become competitors that Tesla cannot ignore. If Tesla exits the Chinese market, it will lose not only sales but also future product iteration capabilities, software capabilities, and cost optimization capabilities, which directly affect Tesla's competition with global rivals.
SpaceX produces only dozens of rockets a year, while Tesla produces millions of cars a year; the two are not even in the same order of magnitude. Rockets belong to typical small-batch, high-complexity discrete manufacturing. Enterprises can bring more and more core capabilities back into their own systems through highly vertical integration. In contrast, the automotive industry relies on a massive socialized supply chain. From components and materials to production equipment, it is connected to thousands of enterprises behind the scenes. No automaker can exist independently of the entire industrial ecosystem.
Precisely because of this, SpaceX can build an increasingly closed supply system, while Tesla finds it difficult to copy this model.
What is even more worth paying attention to is that this actually reflects the changes taking place in the manufacturing systems of China and the U.S.
In the past, the rapid development of the U.S. aerospace industry was largely due to the strong social industrial manufacturing capabilities behind it. Commercial enterprises could continuously obtain mature manufacturing capabilities and technical support from the whole society, and aerospace technology could, in turn, diffuse to more industries.
But today, an increasing number of U.S. high-tech enterprises involving national security are beginning to bring manufacturing capabilities back in-house and establish a more closed supply system. From employee identities and equipment sources to supply chain levels, everything is subjected to strict management. This is not necessarily the result of enterprises actively pursuing efficiency, but rather a choice made to ensure controllability after the continuous contraction of the industrial base.
In contrast, the development of China's commercial aerospace is increasingly relying on the support of the entire social manufacturing capabilities. As private manufacturing enterprises continue to grow, more and more components, equipment, and manufacturing links can be handed over to professional suppliers. Rocket companies, in turn, can concentrate more resources on system integration and key technological innovation. There are more and more participants in the entire industrial chain, and the industrial ecosystem is becoming increasingly open.
If what SpaceX demonstrates today is an increasingly closed industrial system, then what China's commercial aerospace is forming is an increasingly open industrial system. What is truly worth attention is not that SpaceX has added a supply chain regulation, but that the two global manufacturing systems are heading towards two different development paths.