Elon Musk Calls SpaceX-Tesla Merger 'A Good Idea'; Forms Special Committee To Combine The Companies
· Free Press Journal
Elon Musk said that combining SpaceX and Tesla would be 'a good idea' and that the two companies have set up special committees to consider a union. SpaceX shares rose 8 percent in extended trading after his comments.
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Committees yet to agree terms
Musk said the committees have not agreed on any terms for a transaction, according to Reuters. No structure, valuation or timeline for a deal has been disclosed.
The remarks are the clearest signal yet from Musk on a tie-up that investors and analysts have discussed for months. In July, on Tesla's earnings call, he declined to rule out a merger and pointed to growing overlap between the two companies, while saying such a topic could not be discussed on an earnings call. Stifel analysts wrote then that many investors see a combination as inevitable and consider the question to be when, not whether.
Elon Musk today on a potential merger between SpaceX and Tesla:
— Sawyer Merritt (@SawyerMerritt) October 20, 2026
"Both Tesla and SpaceX have formed special committees at the request of shareholders. Because I'm a conflicted party I can't be in on these discussions. I don't think we should assume that a merger is a certainty.… pic.twitter.com/Aerc1PxA8P
First profit as a public company
Musk's comments followed SpaceX's earnings report, its first since going public. The company posted its first profit as a listed firm, Reuters reported. SpaceX's IPO this year raised a record $75 billion, according to earlier Reuters coverage.
AI revenue jumps ninefold
SpaceX's AI revenue rose more than ninefold to $7.6 billion, with most of it coming from renting out computing capacity, Reuters reported. Capital spending nearly tripled to $19.6 billion as the company expanded its compute infrastructure.
Musk said he expects annual recurring revenue of between $500 billion and $1 trillion by the end of 2027, driven by surging demand tied to the AI boom.
Links between the two companies
Tesla already supplies batteries and manufacturing technology for some SpaceX projects, and the two are jointly developing Terafab, a semiconductor plant meant to produce AI chips. Analysts have also noted that Musk holds a far larger voting stake in SpaceX than in Tesla, which could complicate governance questions for Tesla's public shareholders in any deal.