Tesla and SpaceX Form Special Committees to Explore What Would Be the Largest Merger in History

Elon Musk confirmed on Tuesday that Tesla and SpaceX have each formed special committees of independent directors to discuss a potential merger, the most concrete step yet toward combining the rocket maker and the electric vehicle company into a single group worth roughly 3.5 trillion dollars. SpaceX shares rose more than 4 percent in after-hours trading following the comments, while Tesla gained about 1 percent.

Speaking on the SpaceX third quarter earnings call, Musk was careful to manage expectations. He described the topic as feeling like tap dancing on a minefield, noting that because he is a conflicted party he is not allowed to take part in the committee discussions at all. The committees have not agreed on any terms for a transaction, and he stressed there is no guarantee they ever will. For a deal to happen, Tesla shareholders holding 50 percent of all outstanding shares, not merely a majority of votes cast, would have to approve it, a threshold Musk himself called a very high bar.

Still, Musk made clear he believes the combination makes sense. He pointed to cooperation on superintelligence software development, chip design, the Terafab foundry project, robotics, and launch capacity for the StarMind constellation as areas where the two companies could gain enormously from working as one. SpaceX President Gwynne Shotwell added connectivity to that list. Asked directly whether he thinks a merger is a good idea, Musk said yes.

The scale of such a deal would be unprecedented. SpaceX carries a valuation of roughly 2 trillion dollars after its record public listing earlier this year, while Tesla is worth close to 1.5 trillion dollars. SpaceX alone has become an earnings powerhouse: its Super Intelligence unit generated 7.56 billion dollars in quarterly revenue, up 830 percent year over year, and for the first time became the company's largest source of income.

The two companies are already deeply intertwined commercially. SpaceX has purchased more than 100 million dollars worth of Tesla Cybertrucks, and xAI, which SpaceX acquired this year, is a major customer of Tesla's energy storage business. Tesla in 2025 booked 430 million dollars in revenue from xAI and 143 million dollars from SpaceX, and its earlier 2 billion dollar investment in xAI was converted into roughly 19 million SpaceX Class A shares when the acquisition closed.

Market watchers had spotted the groundwork in recent weeks. Tesla's proxy statement filed with the SEC on October 19 set its annual shareholder meeting for December 3 at Gigafactory Texas and revealed that longtime independent director Ira Ehrenpreis joined the SpaceX board in February. The proxy also introduced a retail shareholder auto-voting program that defaults to the board's position, and Musk's 2025 pay package was structured to vest quickly in the event of a change of control.

Nothing is agreed and the hurdles are real, starting with that 50 percent threshold and likely regulatory review of a combination this large. But the formation of formal committees, requested by shareholders, signals that the question is no longer whether the two companies will cooperate more deeply on AI, chips and robotics, but under what single corporate roof they will do it.