Elon Musk fuels Tesla-SpaceX merger buzz with latest comments

MUMBAI: Could Tesla and SpaceX one day share more than a founder? Elon Musk has once again sparked speculation that his electric vehicle and space companies could eventually merge, refusing to dismiss the possibility while pointing to increasing collaboration between the two businesses.

Speaking during Tesla’s earnings call, Tesla, chief executive officer, Elon Musk said the companies are working together on a growing number of initiatives but stressed that any discussion of a merger would have to follow the appropriate corporate process.

“As you can tell from the many collaborations on so many fronts with SpaceX, there’s more and more overlap,” Musk said. “We can’t talk about combining companies and that kind of thing on an earnings call. It’s got to be done with the appropriate process.”

The remarks have reignited a long-running debate among investors over whether Musk’s flagship companies could eventually become a single entity. Speculation has intensified in recent months following SpaceX’s record $75 billion initial public offering process.

According to a Reuters report, after Musk’s comments, Tesla, general counsel, Brandon Ehrhart described SpaceX as a “great partner” that provides “numerous beneficial transactions”, without commenting directly on merger speculation.  

The two companies already have significant operational links. Tesla supplies batteries and manufacturing technologies for several SpaceX projects, while both firms are collaborating on Terafab, a semiconductor manufacturing facility designed to produce artificial intelligence chips.

Supporters of a merger argue that bringing the businesses together would simplify Musk’s corporate structure and create an integrated technology company spanning electric vehicles, artificial intelligence, robotics, advanced manufacturing, energy and space infrastructure.

The latest comments also strengthened confidence among some investors. Deepwater Asset Management, managing partner, Gene Munster said the earnings call increased his expectation that the companies would merge within the next few years.

“I would put the odds that these two will combine at 90 per cent today,” Munster said in a video posted on social media, adding that he would have estimated the probability at 80 per cent just a day earlier.

Earlier this year, SpaceX, president and chief operating officer, Gwynne Shotwell also acknowledged potential benefits, telling CNBC that combining the companies “might make Elon’s life a little easier” by streamlining management across his businesses.

Despite the growing speculation, analysts say a deal would face substantial challenges. JPMorgan warned that obtaining regulatory approvals could prove difficult, particularly in China, where SpaceX’s ties to the US government may raise national security concerns.

Governance could also become a sticking point. Musk controls a significantly larger voting stake in privately held SpaceX than in publicly traded Tesla, adding complexity for Tesla’s minority shareholders if any merger proposal were to emerge.

For now, Musk has offered no roadmap for a combination. But by declining to rule it out, he has ensured that one of the technology industry’s most persistent “what if” conversations remains very much alive.