Tesla and SpaceX are weighing a possible merger that could bring together work in AI, chip design, robotics and connectivity, CEO Elon Musk said Tuesday, Oct. 20, as independent directors assess whether to pursue a deal.
On a SpaceX earnings call, Musk said he could not participate in the committees’ discussions because he was conflicted. “I think it would be a good idea,” he said, adding that the committees had not agreed on terms and might not reach a deal. Musk said shareholders would have to approve any transaction. At Tesla, he said, support would need to represent half of all shares, rather than a majority of votes cast. The full-share voting threshold was described in earlier coverage.
The companies reported different third-quarter results. SpaceX posted revenue of $14.575 billion, up 161% from a year earlier, and net income of $4.4 billion; its capital spending was $19.593 billion. Tesla reported revenue of $28.046 billion, compared with $28.095 billion a year earlier. Net income attributable to common stockholders fell about 43% to $787 million from $1.373 billion.
Reuters and Euronews have estimated the companies’ combined market value at about $3.5 trillion. That estimate reflects their market value, not a proposed merger price.
Reuters reported that SpaceX approached Tesla in recent weeks. People familiar with the talks told the news agency that possible structures under consideration include a SpaceX purchase of Tesla, a newly formed parent company for both businesses, or a stock-based transaction. Reuters described the discussions as preliminary and reported that Tesla, SpaceX and Musk did not respond to its requests for comment. One person with direct knowledge said some participants feared Musk’s public comments could raise shareholder scrutiny and add several weeks to discussions.
Columbia law professor Eric Talley told Reuters a combination could reduce the time Musk spends managing two companies and benefit shareholders. He said the risk of litigation would depend on the deal’s terms. Tesla’s 2016 acquisition of SolarCity led to years of shareholder litigation over Musk’s role and the transaction’s fairness. Delaware’s Court of Chancery ruled for Musk in 2022, and the Delaware Supreme Court affirmed that decision in 2023.
Tesla’s annual shareholder meeting is scheduled for Dec. 3, 2026. Its proxy lists director elections, an advisory vote on compensation and auditor ratification, with no merger vote on the agenda.
