Elon Musk has spent two decades building Tesla and SpaceX into separate trillion-dollar empires. Now he says he is seriously considering folding them into one.
Asked this week whether a merger would be a good idea, Musk answered simply: "Yes." He said special committees have been formed at both companies to assess a potential deal, while cautioning there is no guarantee it happens. "In my opinion, 100%," said David Nicholson, chief technology advisor at the Futurum Group. "It's just a question of when."
The numbers behind history's biggest deal
Tesla is valued at roughly $1.5 trillion and SpaceX at about $2 trillion, meaning a combination would easily surpass any merger ever completed. Any deal would need the backing of half of Tesla's shareholders — a threshold Musk himself called "quite a high hurdle" — and Musk, as chief executive of both companies, cannot take part in shareholder discussions on either side. During Tesla's earnings call this week, where the company reported third-quarter sales of $28.05 billion, essentially flat from $28.1 billion a year earlier, Musk added little beyond a joke that he felt "like I'm tap-dancing through a minefield."
The idea is not entirely hypothetical. Musk has spent the past year consolidating his businesses, with SpaceX acquiring both xAI and X, formerly Twitter, before taking the renamed entity public. Last week's unveiling of a reborn Tesla Roadster, powered in part by SpaceX rocket-thruster technology, served as what Nicholson called a "symbolic embodiment" of the two companies' direction.
What a combined company would look like
A merger would weld Tesla's cars, humanoid robots and self-driving software to SpaceX's rockets, satellites, data centers and telecommunications operations — and, Musk has suggested, move him closer to his long-stated goal of a self-sustaining human settlement on Mars. Analysts say the car business, increasingly squeezed by Chinese rival BYD, which overtook Tesla as the world's biggest EV maker in January, would likely take a back seat to AI infrastructure inside a combined entity. "The question is how much priority cars get inside a company increasingly driven by AI infrastructure," said investment analyst Dan Sheehan of Telos Wealth Advisors, who added that Tesla shareholders would end up holding "a smaller slice of a much larger and more complex business."
The market reaction
Shares of SpaceX rose 8% in after-hours trading on the news, while Tesla climbed 2%. "There's no real precedent for how a public company like Tesla gets priced in this," Sheehan said. Experts told the BBC that Tesla drivers are unlikely to notice drastic changes in the near term even if a deal goes through — the vehicles, Nicholson said, seem almost "an afterthought" next to the prospect of combining the two companies' technology. The biggest winner, by most accounts, would be Musk himself: the merger would give him greater voting control over the combined company than he holds at Tesla alone, a factor the special committees weighing the deal will have to confront before any vote goes to shareholders.
