Musk explores historic Tesla-SpaceX merger as shareholders face key vote

Elon Musk says Tesla and SpaceX are examining a possible merger, a transaction that would create a company larger than any previous corporate combination if approved, according to BBC News and The Guardian. Musk, who leads both companies, said a merger would be a good idea and that there was significant potential in combining their operations. Special committees have been formed by the two businesses to assess the proposal, but Musk stressed that no terms had been agreed and that a deal was not guaranteed.

Tesla is valued at roughly $1.5 trillion, while SpaceX is valued at about $2 trillion, according to the BBC. Any transaction would require the approval of 50% of all Tesla shareholders, a threshold Musk described as a high hurdle. Because he is chief executive of both companies, he cannot participate in shareholder discussions about the deal.

The proposed combination would bring together Tesla’s electric vehicles, robotics and autonomous-driving technology with SpaceX’s rockets, satellites, telecommunications operations and data centres. Musk has also pointed to common work in chips, artificial intelligence and other technologies as a reason the businesses could benefit from operating together. Investors received little additional information during Tesla’s earnings call.

Musk said he had already said what needed to be said about the merger and joked that he felt as though he was “tap-dancing through a minefield”. He also said presenting the combination as certain would overstate the position. Tesla reported third-quarter revenue of $28.05 billion.

The Guardian said that exceeded Wall Street’s $27.9 billion forecast, while the BBC reported the company’s revenue as slightly below the same period a year earlier. Automotive revenue fell 3% year on year, and revenue was also lower than the previous quarter’s $28.23 billion. The company is increasingly presenting itself as an artificial-intelligence and robotics business rather than solely a carmaker.

Tesla is developing its Optimus humanoid robot and driverless Robotaxi service, although both projects have faced production or expansion difficulties. Analysts cited by the Guardian said the company had continued to miss some of Musk’s ambitious targets for autonomous vehicles and robot production. The possible merger has also raised questions about shareholder value and control.

Analysts told the BBC that Tesla investors could own a smaller share of a much larger and more complex business, while Musk could gain greater voting control over the combined company. Regulatory scrutiny could increase as well, particularly given Musk’s central role across several businesses. Tesla shares rose in after-hours trading and SpaceX shares also gained, according to the BBC.

But the reports make clear that the proposal remains exploratory. A shareholder vote, committee review and potentially regulatory examination would all precede any merger.