Elon Musk Leaves Open Possibility of Tesla-SpaceX Merger During Earnings Call
During Tesla's July 22 earnings call, CEO Elon Musk did not rule out a potential merger between Tesla and SpaceX. He acknowledged growing synergies between the two companies, particularly in areas like Terafab, an upcoming chipmaking venture by SpaceX that could benefit both firms. While he declined to comment on specific deal terms at the time, his remarks have sparked speculation about combining these major market players. The overlap is already tangible: Tesla's Grok AI comes from xAI, which was absorbed by SpaceX before its IPO; Cybercab robotaxis may rely on Starlink for connectivity; and Terafab could supply chips to Tesla. JPMorgan has suggested a merger would make strategic sense but warned that execution poses significant challenges. Two major obstacles include valuation complexities due to both companies trading at high multiples, as well as regulatory hurdles given SpaceX's defense contracts and Tesla’s reliance on China for production and sales.
