Tesla and SpaceX Form Independent Committees to Explore Merger; Musk Expresses Support
On SpaceX's third-quarter earnings call, Musk said Tesla and SpaceX have each formed independent committees to explore a potential merger, and that he personally supports the idea, citing opportunities in AI, chip design, robotics, and connectivity technology. The two companies have not reached agreement on transaction terms, and the merger remains uncertain; Musk said the committees are composed of independent directors and that the evaluation process does not involve him, in order to avoid conflicts of interest arising from his financial interests in both companies. If the transaction proceeds, Tesla would need voting support representing 50% of all shares, not just a majority of votes cast. SpaceX's third-quarter revenue was about $14.6 billion, up 161% year over year, with net profit of $4.4 billion, and the AI business contributed significantly to growth; the two companies' joint chip manufacturing project Terafab is expected to produce its first test chip around May or June 2027, with a target of mass production in the third quarter of 2028. Reuters, citing people familiar with the matter, said the talks could also lead to SpaceX acquiring Tesla, but neither company has confirmed the transaction structure or valuation.
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Tesla and SpaceX have formed independent committees to explore a potential merger, Elon Musk said during SpaceX’s third-quarter earnings call. The billionaire backed the idea, citing opportunities in AI, chip design, robotics, and connectivity.
However, neither company has agreed on transaction terms, and a merger remains uncertain.
Musk said shareholders had requested the formation of the committees, which will assess the proposal without his involvement. He leads both companies and has financial interests in each, creating a conflict of interest.
“Do I think it would be a good idea? Yes,” Musk said during the call. He added that shareholders must support any eventual deal, particularly at Tesla.
Musk described the process as “tap dancing through a minefield”, highlighting the challenges of combining two companies with separate shareholders and interests. He said the committees are made up of independent directors and have not yet reached an agreement. He also cautioned investors against treating a merger as certain.
The potential merger would bring Tesla’s electric vehicles, energy storage, and robotics operations together with SpaceX’s launch services, satellite communications, and growing AI business.
Musk said the companies already collaborate across several technologies and their work increasingly overlaps as both invest in computing infrastructure and automation.
SpaceX’s latest financial results add context to the merger discussions. The company reported third-quarter revenue of about $14.6 billion, up 161% year-on-year, and net income of $4.4 billion. Its AI business contributed significantly to growth, driven partly by demand for computing capacity from AI companies.
Tesla shareholders face a key hurdle if the companies pursue a deal. Musk said approval would require votes representing 50% of all Tesla shares, not merely a majority of votes cast. The requirement could complicate negotiations, even if the independent committees recommend a merger.
The prospect of a merger has attracted attention because it could consolidate Musk’s interests across electric vehicles, space technology and AI. The companies’ joint chip manufacturing venture, Terafab, expects to produce its first test chip around May or June 2027.
Musk said the project aims to reach volume production by the third quarter of 2028.
The talks could also lead to SpaceX acquiring Tesla, Reuters reported, citing a person familiar with the matter. Tesla has been working with an investment bank to advise on the discussions. However, neither company has confirmed a transaction structure or valuation.
The companies’ share prices rose following Musk’s comments. SpaceX shares gained around 8% in extended trading, while Tesla shares rose 1.54%.