Musk backs potential Tesla and SpaceX merger as committees assess deal
Developing story first seen 3 hours ago
The prospect of Tesla and SpaceX joining forces has become more concrete: Musk says special committees are assessing a possible merger, though no deal has been agreed. He supports combining the businesses, which together are valued at about $3.5 trillion, in what would be the largest merger ever.
Musk points to shared work in chips, artificial intelligence and other technology, spanning Tesla’s cars, robots and self-driving systems and SpaceX’s rockets, satellites and data centres. The deal would need approval from half of Tesla’s shareholders, a threshold Musk called high; Tesla shares rose 2% and SpaceX shares 8% in after-hours trading, while analysts say drivers are unlikely to see major near-term changes.
- Committees are assessing a possible Tesla and SpaceX merger.
- Their combined value is about $3.5 trillion.
- Half of Tesla shareholders would need to back the deal.
Full account
Elon Musk has said he supports the idea of combining Tesla and SpaceX, while making clear that no deal has been agreed. Speaking on a call with financial analysts on Tuesday, he said committees at both companies were examining a possible merger. The committees have yet to agree terms, and any transaction would require shareholder approval.
The companies have very different operations, though both are investing in advanced technology. Tesla makes electric cars and is expanding its work in robotics and self-driving systems. SpaceX builds rockets, operates Starlink satellite internet and has a growing business in computing infrastructure. A merger could bring these activities under one corporate roof, but its scale would be unprecedented: the reports put Tesla’s value at about $1.5tn and SpaceX’s at $2tn.
Musk said he was excluded from the committees because he leads both companies and has a conflict of interest. He described the approval process as difficult: at least half of Tesla shareholders would need to support a deal. The reports note that investors have previously backed a large compensation package for Musk, but support for that arrangement does not establish how they would vote on a merger. Analysts also point to uncertainty over how Tesla would be valued within a larger, more complex group, and the possibility that its shareholders would own a smaller proportion of the combined business.
The proposal fits a broader pattern of Musk bringing his companies closer together, and could support his ambitions in AI and space exploration. But the reports differ in emphasis: one focuses on the potential technology links and the limited near-term effect on Tesla drivers, while the other gives more attention to SpaceX’s revenues, its computing expansion and scrutiny of its Starshield service in Ukraine. Both stress that the merger remains under review, with no assurance it will proceed.
Where outlets differ
The first report highlights possible technology synergies, Musk’s Mars ambitions and the likelihood of little immediate change for Tesla drivers; it also cites analysts’ views on valuation and shareholder dilution.
The second report gives more detail on SpaceX’s financial growth and computing business, describes the shareholder threshold and Musk’s conflict of interest, and discusses scrutiny of Starshield’s role in Ukraine.
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Originally published by BBC Science as “Elon Musk says merging Tesla and SpaceX is a good idea. Why?”.