Tesla and SpaceX are exploring the possibility of a merger. Musk cannot participate in the discussions.
Tesla and SpaceX established special committees of independent board members on October 20, 2026, to assess the possibility of merging the companies. Elon Musk confirmed that formal analyses had begun during SpaceX’s third-quarter earnings presentation. There are still no terms for the transaction, valuation, or decision regarding whether the merger will actually go through.
Musk admitted he supports the idea but, as the leader of both companies, cannot participate in the committees’ work. He described this situation as a peculiar “kabuki dance,” where two groups are negotiating without his involvement.
Tesla and SpaceX Are Already Working on Shared Technologies
The rumors about a merger didn’t appear out of nowhere. In September, during the All-In Summit, Musk suggested that close collaboration between his companies might eventually require a concrete decision. The topic resurfaced after Tesla unveiled the Roadster with cold gas engine technology, which is intended to use solutions developed by SpaceX.
There are more joint projects. Musk mentioned developing software related to artificial intelligence, chip design, robotics, communications, and building the Terafab facility in Austin. Tesla also holds a small stake in SpaceX, acquired as part of an earlier investment in xAI.
This sounds like a technological justification for the merger, but it still says nothing about its profitability for shareholders. SpaceX reported revenue of $14.58 billion for the third quarter, 161 percent higher than the previous year. The segment dubbed by the company “Super Intelligence” was expected to generate $7.56 billion and become its largest component. These are the company’s figures, and any valuation of SpaceX will have a direct impact on the number of Tesla shares offered to its owners.
The hardest part will be shareholder voting
Just forming committees does not mean approval of the merger. Musk noted that considering the merger a done deal would be an overstatement. First, independent directors must agree whether the transaction makes sense, and then determine its terms and share exchange ratio.
On Tesla's side, the threshold is set high. Approval would require 50 percent of all outstanding shares, not just a majority of those voting. In 2025, the proposal to change the board structure received support equivalent to 39.4 percent of all shares and was rejected, despite having a majority vote in favor of the change.
Reports indicate Musk's stake in Tesla is around 20-22 percent. This discrepancy does not change the overall picture. Without broad support from institutional and retail investors, Musk will not carry out the merger on his own.
The merger would involve issuing new shares or exchanging existing securities, thereby reducing the percentage ownership of Tesla’s current shareholders. This does not necessarily mean a loss in value. Everything depends on SpaceX’s valuation and the exchange ratio. Without these figures, the claim of “diluting all shareholders” remains an oversimplification.
A separate issue is Musk’s compensation package. One description suggests that in the event of a merger, some shares might be granted without meeting the promised goals regarding robots and robot taxis. However, the available materials do not contain the full text of the plan, so it is impossible to independently confirm exactly how this clause would function.
There will be no vote on December 3
Tesla has already submitted documents to the shareholders' meeting scheduled for December 3, 2026. The agenda includes electing Musk, Robyn Denholm, and JB Straubel to the board, voting on compensation, and approving an auditor. There is no merger on the agenda.
If the committees agree on the terms, Tesla will likely need to hold a separate meeting. For now, we have a formal review of the merger possibility, not a finalized deal. The three key figures still missing are SpaceX’s valuation, the stock exchange ratio, and the scale of new shares allocated to Musk.
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