Elon Musk has reportedly discussed merging Tesla and SpaceX with people close to him, and the idea has been openly discussed internally among Tesla employees. A merger would combine rockets, satellites, electric vehicles, AI infrastructure, and energy storage, creating a conglomerate valued around $3.35 trillion to $3.6 trillion based on SpaceX’s IPO target range and Tesla’s market capitalization. The companies are already intertwined through purchases and investments involving Tesla Megapack systems, Cybertrucks, and xAI, plus Tesla selling solar equipment and parts to SpaceX and SpaceX supporting Cybertruck materials. Musk signaled convergence in a post, and Tesla and SpaceX announced a joint semiconductor facility in Austin, Terafab, for both vehicle and space-based data center chip production. An analyst estimates an 80% to 90% merger probability with completion in the first half of 2027, with deal mechanics becoming possible after SpaceX filed its S-1.
"Elon Musk has reportedly discussed merging Tesla and SpaceX with people close to him, according to CNBC, which cited sources familiar with the conversation. Tesla employees have long expected such a transaction and the topic is openly discussed internally, according to internal sources. With SpaceX is days away from kicking off its Wall Street roadshow for what could be the largest IPO in market history, this would be the first time the company will have public market currency to execute a stock-for-stock deal with Tesla."
"The financial logic for a merger would make sense. A combined SpaceX and Tesla would create a conglomerate spanning rockets, satellites, electric vehicles, AI infrastructure, and energy storage valued at roughly $3.35 trillion to $3.6 trillion based on SpaceX's IPO target range and Tesla's current market capitalization. The two companies are already more intertwined than most people realize. SpaceX bought $697 million worth of Tesla Megapack systems for xAI data centers and $131 million worth of Cybertrucks. Tesla invested $2 billion in xAI, which subsequently merged with SpaceX."
"Past transactions also include Tesla selling solar equipment and parts to SpaceX, and SpaceX helping with Cybertruck materials. Musk himself signaled where this was heading in November 2025 when he posted on X, "My companies are, surprisingly in some ways, trending towards convergence." Tesla and SpaceX announced a joint semiconductor fabrication facility in Austin called Terafab on the Gigafactory Texas campus, covering two advanced chip factories, with one serving Tesla's AI needs for vehicles and Optimus robots, the other targeting space-based data centers under SpaceX's infrastructure vision."
"Wedbush analyst Dan Ives places the probability of a merger at 80% to 90% with a target completion in the first half of 2027. The mechanics of a deal became possible the moment SpaceX filed its S-1"
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