Musk says Tesla and SpaceX merger could bring gains, but deal remains uncertain

Elon Musk says he sees “a lot to be gained” from merging Tesla and SpaceX, but the companies have not agreed a deal and any merger would need shareholder approval.

Musk said special committees were assessing a possible combination. He has argued that the businesses’ work on chips, artificial intelligence and other technologies could complement one another. Tesla makes electric cars and humanoid robots, while SpaceX operates rockets, satellites and telecommunications services. [1]

At the valuations cited by the BBC — about $1.5tn for Tesla and $2tn for SpaceX — a merger would be the largest ever. But Tesla shareholders would face a “quite a high hurdle”: half would need to back the proposal, according to the report. Musk is chief executive of both companies and a major Tesla shareholder, but cannot participate in shareholder discussions about the deal. [1]

The potential benefits and risks are still being debated. Investment analyst Dan Sheehan told the BBC that combining the companies’ technologies could appeal to shareholders, but Tesla investors might end up owning a smaller share of a larger, more complex business. He said there was no real precedent for valuing such a transaction. [1]

For Tesla customers, experts quoted by the BBC expect little immediate change. Over time, closer links between Tesla’s self-driving and robotics work and SpaceX’s artificial intelligence and satellite network could affect future products, though the report noted that cars may receive less attention in a combined business focused increasingly on AI infrastructure. [1]

A merger could also increase Musk’s voting control over the combined company. The BBC reports that this is one factor for the special committee to consider; analysts also raised the prospect of greater regulatory scrutiny. For now, the committees’ assessment and the need for shareholder backing leave the outcome uncertain. [1]