Elon Musk confirmed on Tuesday that Tesla and SpaceX have established special committees to explore a potential merger between the two companies. The announcement came during SpaceX’s third-quarter earnings call, where Musk emphasized that while there is significant merit in combining the businesses, no agreement on terms has been reached and the outcome remains uncertain. Both committees consist of independent directors formed at shareholders’ request, and Musk, citing a conflict of interest, is not involved in their deliberations.
Musk, who is CEO of both Tesla and SpaceX, noted that any merger would require approval from at least 50% of Tesla’s total shares, not just those voting. The electric vehicle manufacturer has a market valuation of approximately $1.5 trillion, while SpaceX’s valuation is estimated at around $2 trillion. Analysts have speculated that combining the companies could unify Musk’s major business ventures under one entity, especially as both Tesla and SpaceX are increasingly focused on artificial intelligence and advanced technologies.
SpaceX reported strong financial results for the third quarter, with revenues rising 161% year-on-year to $14.58 billion, surpassing analysts’ expectations. The growth was largely driven by its Starlink satellite internet service and its AI unit, recently rebranded as SpaceX Super Intelligence. This segment alone generated $7.6 billion in revenue, an 830% increase from the previous year. SpaceX also reported a net profit of $4.4 billion and capital expenditures increased substantially to $19.6 billion for the quarter.
The space and connectivity business contributed $1.8 billion and $5.2 billion in revenue, respectively, marking solid gains. Starlink’s consumer user base was reported at 10.3 million as of September 30, following a prior decline attributed to adjustments in subscriber counts. Executives also outlined ambitions to expand into mobile phone services leveraging newly acquired spectrum.
Despite the financial momentum and Musk’s endorsement of the idea, he cautioned that a merger faces significant hurdles including shareholder approval and potential regulatory scrutiny due to the scale of the combined entity. SpaceX and Tesla each have complex operations spanning space exploration, satellite internet, electric vehicles, and artificial intelligence, which would require detailed integration.
The potential merger announcement arrives amid ongoing geopolitical and domestic developments involving Musk’s companies. SpaceX recently faced scrutiny after Ukraine’s president accused it of restricting access to its military-grade Starlink service, an allegation Musk denied by stating control lies with the U.S. government. Separately, Musk has become active in U.S. domestic politics, contributing extensively to political campaigns and collaborating on Pentagon projects related to defense technology.
Tesla is scheduled to release its third-quarter financial results soon, following a recent product unveiling of the Tesla Roadster 2, which drew attention for its unique performance demonstration. Both companies’ stocks saw positive reactions after Musk’s statements, reflecting investor interest in the potential merger and ongoing growth prospects.