Tesla and SpaceX CEO Elon Musk arrive at the inauguration of US President-elect Donald Trump in the U.S. Capitol Rotunda in Washington, DC, on January 20, 2025.
Chip Somodevilla | via Reuters
After SpaceX filed to go public in a potentially record-breaking IPO, some are theorizing another big thing on Wall Street: a merger between the spaceship maker and SpaceX. tesla.
“The holy grail could be to integrate SpaceX and Tesla in some way, step by step, and create a link between these two companies, two disruptive technology stalwarts who are trying to usher in the AI revolution,” said Wedbush analyst Dan Ives, who expects the two companies to merge by next year.
A combination of the two companies may make sense. After all, both count Elon Musk as their CEO. Ives also noted that Musk wants “more ownership and control of the AI ecosystem,” and that the SpaceX-Tesla merger could facilitate that.
However, analysts and traders are divided in their speculations. Kalsi traders say there is only a 33% chance of that happening by May 2027, and even lower chances in the months before then. On Friday, traders saw a nearly 77% chance that the merger would take place by April 2027, but that chance fell by about 40 percentage points the next day.
The timing of the merger may be ideal for Tesla. In April, the company lagged behind competitors BYD and auto conglomerates Geely and Chery in selling the most electric vehicles in China, according to monthly wholesale statistics from the China Passenger Vehicle Association. BYD beat Tesla as the electric car leader last year.
Merger rumors are not new. Tesla and SpaceX, which also owns artificial intelligence company xAI, are already developing a semiconductor manufacturing facility, TerraFab, in East Texas. The project will produce chips for both companies and could cost up to $119 billion, according to filings.
Musk also sparked conversation about the merger by explaining the challenges for the two companies working on Terafab during an earnings call last month.
“SpaceX will be responsible for the initial phase of scaled-up Terafab,” he said. “Any type of intercompany relationship requires the approval of the boards of directors of both SpaceX and Tesla. It must go through dispute resolution.”
“Unfortunately, it’s going to be very complicated because you have to serve Tesla shareholders and SpaceX shareholders and strike the right balance,” he said.
Walter Isaacson, who wrote a best-selling biography of Musk in 2023, also questioned the merger in April.
“Elon Musk is constantly moving engineers back and forth between his companies. I think he wants to make this one big company,” he said on CNBC’s “Squawk Box.”
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
