Tesla and SpaceX are exploring a potential merger valued at $3.5 trillion, with independent board members from both companies forming special committees to negotiate terms. Elon Musk, CEO of both firms, confirmed the talks during SpaceX’s third-quarter earnings call on Tuesday but emphasized he is not involved in the discussions due to conflict of interest.
Musk explained that as a conflicted party owning about 20% of Tesla and 45% of SpaceX, he cannot participate in the merger talks led by the independent directors. The committees have yet to reach an agreement, and Musk cautioned there is no certainty the merger will happen. Tesla stock rose just over 1% in after-hours trading, while SpaceX shares increased more than 5% following the announcement.
The merger talks come amid Musk’s dual leadership of both companies, where he controls approximately 82% of SpaceX’s voting power. The potential deal would create one of the largest combined entities in the market, blending Tesla’s electric vehicle and energy business with SpaceX’s aerospace and satellite operations. Such a merger would be unprecedented in scale and scope within the technology and transportation sectors.
SpaceX president Gwynne Shotwell and CFO Bret Johnsen joined Musk during the earnings call, underscoring the significance of the discussions. While no formal agreement exists, the special committees continue to evaluate the strategic and financial implications of a merger valued at $3.5 trillion, a figure Musk described as an ambitious but plausible valuation.