Tesla and SpaceX have established special committees of independent directors to evaluate a potential merger between the electric automaker and the space exploration company, Chief Executive Elon Musk announced Tuesday.
Speaking during a quarterly earnings call for SpaceX, Musk acknowledged that combining the two firms is under active consideration, calling the prospect a “good idea.” However, he cautioned that an agreement remains uncertain and would require clearing difficult shareholder votes, BBC News reported.
A combined entity would unite Tesla, valued at roughly $1.5 trillion, and SpaceX, valued at about $2 trillion, creating one of the largest corporate mergers in history with a valuation exceeding $3.5 trillion.
Independent Committees and Governance Hurdles
Because Musk serves as chief executive and holds substantial equity in both publicly traded companies, he stated that he cannot participate in the exploratory discussions. He described himself as a “conflicted party,” according to The Verge.
Musk told analysts that the independent director panels were established following interest from shareholders. “So it’s an odd kabuki dance where two groups of people are talking and I can’t be in the conversation,” Musk said, as reported by The Verge. He previously compared discussing the potential transaction to “tap dancing through a minefield,” according to BBC News.
Musk noted that the groups have not settled on any transaction terms. If the committees do agree on a proposal, winning shareholder approval will present a major challenge. Musk pointed out that the transaction would require support from at least 50 percent of all outstanding Tesla shares, not merely a majority of votes cast, describing that benchmark as “quite a high hurdle to achieve.”
Strategic Overlap Across Musk’s Empire
Musk argued that substantial operational and technological overlap justifies the combination. On the call, he pointed to joint development opportunities in artificial intelligence software, robotics, microchip engineering, satellite connectivity through Starlink, and manufacturing initiatives such as the TeraFab, Business Insider reported.
“I do think there’s a lot of merit to combining companies as we are pretty much in the superintelligence singularity,” Musk said, according to The Verge.
The two companies have already collaborated across multiple technical efforts. Recently, Tesla demonstrated a version of its planned Roadster equipped with SpaceX cold-gas thruster technology that briefly hovered during an exhibition, Business Insider reported.
A merger would mark the latest step in consolidating Musk’s corporate holdings. In 2025, Musk’s artificial intelligence venture, xAI, acquired the social media platform X, and SpaceX subsequently purchased xAI in February, according to Business Insider.
Market Reaction and Upcoming Milestones
Shares of both companies climbed in after-hours trading following Musk’s remarks. SpaceX advanced roughly 6.6 percent, while Tesla rose about 1.6 percent, Business Insider reported.
Wall Street analysts have debated how a transaction might be structured. Financial analysts and legal observers widely anticipate that SpaceX would absorb Tesla through a stock swap rather than vice versa, given SpaceX’s higher market valuation, according to The Verge. Such a move would leave SpaceX shareholders with majority control of the merged enterprise, though Tesla investors could face equity dilution or concern over the substantial capital expenditures required for space exploration.
Whether a formal proposal will emerge remains unknown. However, analysts at Barclays recently indicated to clients that an agreement could be unveiled prior to Tesla’s scheduled annual shareholder meeting on Dec. 3, 2026, The Verge reported.
