Musk confirms he is considering merging Tesla and SpaceX

Special committees formed to examine what would be one of the largest mergers in history

By LineZotpaper

Published22 October 2026

Read Time3 min

Elon Musk has confirmed he is actively considering merging Tesla and SpaceX, his two biggest companies, and said special committees within both companies have been formed to examine the move. Speaking on a call with financial analysts about SpaceX's latest results, Musk said a combination had merit, though he cautioned that no terms have been agreed and the deal would ultimately require shareholder support.

Elon Musk has confirmed he is actively considering merging Tesla and SpaceX, his two biggest companies, and said special committees within both companies have been formed to examine the move.

Speaking during a call with financial analysts to discuss SpaceX's latest results on Tuesday, Musk said he believed a combination had merit. "Do I think it would be a good idea? Yes," he said, while cautioning that no agreement on terms has been reached. "The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will," he said. "But I do think there is a lot of merit to merging and a lot to be gained."

With Tesla valued at roughly $1.5 trillion and SpaceX around $2 trillion, a merger would rank among the largest in history. Musk, who is chief executive of both companies, said he is not on either special committee, describing himself as a "conflicted party" and comparing public comment on the matter to "tap dancing through a minefield". A combination would ultimately be decided by shareholders, with at least 50 per cent of Tesla shareholders needed to approve it, a threshold Musk called "quite a high hurdle to achieve".

The announcement comes as SpaceX's business mix shifts. Starlink revenue rose to $5.2bn in the three months to 30 September, from $3bn a year earlier, while revenue from selling cloud compute capacity to tech companies including Anthropic and Google reached $7.5bn in the quarter, up from $813m. SpaceX overall is not profitable, losing $1.1bn across the first nine months of the year despite revenue of $27bn, though it reported a $4.4bn profit in the most recent quarter.

SpaceX shares rose 8 per cent in after-hours trading following Musk's comments, while Tesla shares gained 2 per cent ahead of its own quarterly results on Wednesday.

The possible merger continues a trend of Musk consolidating his companies. Before SpaceX's market debut in June, it acquired xAI and X, the platform formerly known as Twitter, and the two companies recently launched Terafab, a combined chipmaking effort. Musk said a full merger would make sense for the work each company is doing around chips, artificial intelligence and software.

Analysis

Why This Matters

A combined Tesla and SpaceX would be one of the largest companies ever, with a valuation around $3.5 trillion at current levels, reshaping Musk's business empire.
The merger would bring together electric vehicles and robotics with rockets, satellites and AI infrastructure, potentially allowing resources and technology to flow across Musk's companies.
The outcome depends on shareholder approval, giving investors in both companies significant power over whether the deal proceeds.

Background

Musk has been pulling his companies closer together over the past year. SpaceX acquired xAI and X before its stock market debut in June, and Tesla and SpaceX jointly launched Terafab, a chip manufacturing effort. Musk has said the two companies' work in chips, AI and software would make a merger logical. SpaceX's cloud computing business, which serves companies such as Anthropic and Google, has grown rapidly, while its Starlink satellite network continues to expand. The Starshield government business has also drawn scrutiny over reports that Ukraine's access to the network has been limited, with US President Donald Trump and Musk both denying they ordered any slowdown.

Key Perspectives

Musk: He argues a merger has clear benefits for the companies' shared work in chips, artificial intelligence and software, while acknowledging the process is politically delicate as chief executive of both. Shareholders: Tesla investors must provide at least 50 per cent approval for a combination, which Musk described as a high hurdle. Investors previously backed a roughly $1tn compensation package for Musk last year. Critics and skeptics: The deal's scale raises governance questions, including how the two boards' special committees would set terms and whether SpaceX's government contracts, including Starshield, would complicate a merger with a consumer carmaker.

What to Watch

Tesla's quarterly results on Wednesday, which could affect shareholder sentiment ahead of any merger vote.
Any recommendation from the two special committees on terms of a potential transaction.
Regulatory and government reaction, particularly given SpaceX's sensitive Starlink and Starshield contracts.

Sources

Elon Musk confirms he is considering merging Tesla and SpaceX · BBC News

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12 claims in this story checked against 1 source: 12 supported.

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SupportedMusk is actively considering merging Tesla and SpaceX, described as his two biggest companies.BBC News: “Elon Musk has said he is actively considering merging Tesla and SpaceX, his two biggest companies.”
SupportedSpecial committees at both companies have been formed to examine the proposed merger.BBC News: “he said special committees within both companies had been formed to examine the move.”
SupportedThe merger would be one of the largest in history.BBC News: “a combination of the two companies would mark one of the largest mergers in history.”
SupportedMusk said, “Do I think it would be a good idea? Yes”.BBC News: ““Do I think it would be a good idea? Yes,” Musk said during a call with financial analysts to discuss SpaceX's latest results on Tuesday.”
SupportedMusk said the special committees had not agreed on transaction terms and there was no guarantee they would.BBC News: ““The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will,” he said.”
SupportedMusk said there was “a lot of merit” to merging and “a lot to be gained”.BBC News: ““But I do think there is a lot of merit to merging and a lot to be gained.””
SupportedTesla was valued at roughly $1.5 trillion and SpaceX at about $2 trillion.BBC News: “With Tesla valued at roughly $1.5 trillion (£1.1 trillion) and SpaceX at $2 trillion, a combination of the two companies would mark one of the largest mergers in history.”
SupportedMusk said he was not on either special committee and described himself as a “conflicted party”.BBC News: “Musk ... said he is not included in either of the special committees considering the mega-merger. He described himself as a “conflicted party” as the chief executive of both Tesla and SpaceX.”
SupportedMusk compared commenting on a possible combination to “tap dancing through a minefield”.BBC News: “Even commenting on the possibility of combining the two companies, Musk compared it to “tap dancing through a minefield”.”
SupportedAt least 50% of Tesla shareholders would need to approve a combination; Musk called that “quite a high hurdle to achieve”.BBC News: “At least 50% of Tesla's shareholders would need to approve a combination, which Musk described as “quite a high hurdle to achieve”.”
SupportedStarlink revenue rose to $5.2 billion from $3 billion a year earlier, while cloud-compute revenue reached $7.5 billion from $813 million.BBC News: “Starlink's total revenue rose to $5.2bn in the three months to 30 September from $3bn in the same period last year. ... The business generated revenues of $7.5bn over the three months, up from $813m last year.”
SupportedSpaceX lost $1.1 billion over the first nine months despite $27 billion in revenue, but made a $4.4 billion profit in the most recent three months.BBC News: “SpaceX, as a whole is not profitable, despite revenue jumping to $27bn from $13.7bn over the first nine months of the year. Over that same period it lost $1.1bn although it did report a $4.4bn profit for the most recent three months.”