Musk Leaves Door Open to Tesla-SpaceX Merger

Elon Musk has left the door open to a merger between Tesla and SpaceX, citing growing overlap between the two companies.

“As you can tell from the many collaborations on so many fronts with SpaceX, there’s more and more overlap”, Musk said during Tesla’s earnings call on Wednesday.

“We can't talk about, you know, combining companies and that kind of thing on an earnings call”, he added. “It’s got to be done with the appropriate process.”

Speculation about a merger intensified during SpaceX’s record $75bn initial public offering process. Tesla already supplies batteries and manufacturing technology for some SpaceX projects, while the companies are jointly developing Terafab, a semiconductor facility designed to produce AI chips.

Supporters argue that a merger could simplify Musk’s corporate empire and create a more integrated business spanning artificial intelligence, robotics, manufacturing, energy and space infrastructure.

JPMorgan analysts said the companies were already deeply integrated, citing shared engineering talent, AI infrastructure, Terafab and Musk’s leadership as factors that could facilitate an eventual merger.

Gene Munster, managing partner at Tesla investor Deepwater Asset Management, put the likelihood of a merger at 90%, up from 80% a day earlier.

Any deal could nevertheless face significant obstacles. JPMorgan pointed in particular to the difficulty of securing regulatory approval in China, where national security concerns over SpaceX’s ties to the US government could pose problems.

Musk also holds a much larger voting stake in SpaceX than in Tesla, complicating governance considerations for Tesla shareholders.

(Reuters, bak)