Elon Musk said on Tuesday that special committees within Tesla and SpaceX are actively examining a potential merger of the two companies, though he stressed no deal is certain and shareholder approval would be required.
"Do I think it would be a good idea? Yes," Musk told financial analysts during SpaceX's quarterly earnings call. "The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will. But I do think there is a lot of merit to merging and a lot to be gained."
A combination of the two firms would rank among the largest mergers in history. Tesla is valued at roughly $1.5 trillion, while SpaceX is valued at approximately $2 trillion.
Musk noted that a merger would make strategic sense given the overlapping work both companies are pursuing around chips, artificial intelligence and software. He cited Terafab, a joint manufacturing effort between the two companies to produce computer chips, as an example of how they already collaborate. He also said SpaceX's recent acquisition of xAI and Musk's ownership of X platform (formerly Twitter) reflect his broader push to consolidate his various companies under fewer banners.
Musk described himself as a "conflicted party" and said he is not part of either company's special committee. He characterized the situation as "tap dancing through a minefield" and noted that at least 50% of Tesla shareholders would need to approve any merger, which he called "quite a high hurdle to achieve."
SpaceX shares rose 8% in after-hours trading following the announcement. Tesla shares climbed 2% after declining slightly in recent weeks. Tesla is scheduled to report its own quarterly results on Wednesday.
SpaceX as a whole is not currently profitable, having lost $1.1 billion through the latest quarter. Its most profitable division is cloud compute capacity for tech companies like Anthropic and Google, which generated $7.5 billion in revenue. Starlink contributed $5.2 billion in revenue.