Elon Musk has once again fueled speculation about a potential merger between Tesla and SpaceX, suggesting that the growing collaboration between the 2 companies could eventually lead to a combination.
Speaking during Tesla’s earnings call, Musk did not rule out the possibility of merging the electric vehicle maker with the space company. He said, “As you can tell from the many collaborations on so many fronts with SpaceX, there’s more and more overlap.” He further added, “We can’t talk about, you know, combining companies and that kind of thing on an earnings call. It’s got to be done with the appropriate process.”
Speculation around a merger has been building for years and gained further momentum during SpaceX’s record $75 billion initial public offering process.
Following Musk’s remarks, Tesla General Counsel Brandon Ehrhart described SpaceX as a “great partner” that provides “numerous beneficial transactions.”
Gene Munster, Managing Partner at Deepwater Asset Management, said the earnings call strengthened his belief that the companies would merge in the coming years. He said, “I would put the odds that these two will combine at 90% today.” He added, “If you were going to ask me yesterday I would have said it’s 80%.”
Tesla already supplies batteries and manufacturing technologies for several SpaceX projects. Both companies are also working together on Terafab, a semiconductor manufacturing facility designed to produce AI chips.
Supporters believe a merger could simplify Musk’s business empire by bringing together AI, robotics, manufacturing, energy, and space infrastructure under a single organization.
Analysts at JPMorgan recently said operational integration between the 2 companies is already significant, citing shared engineering talent, AI infrastructure, Terafab, and Musk’s leadership. Stifel analysts also noted that many investors see a merger as inevitable.
SpaceX President and COO Gwynne Shotwell previously said combining the companies “might make Elon’s life a little easier” by streamlining management.
However, analysts also warned that regulatory approvals, particularly in China, and differences in Musk’s voting control between Tesla and SpaceX could make any potential merger more challenging.
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