SpaceX and Tesla Explore Merger With Shareholder Hurdles Ahead

SpaceX and Tesla have formed separate committees of independent directors to examine a possible merger, Elon Musk said.

The discussions remain exploratory: the committees have not agreed on transaction terms, Musk said. Fortune estimates that a combined company would have a market value of roughly $3.5 trillion (£2.62 trillion). Separately, Axios’s standalone estimates put SpaceX at roughly $2 trillion (£1.5 trillion) and Tesla at roughly $1.5 trillion (£1.12 trillion).

Shares in both companies rose in after-hours trading after Musk disclosed the discussions, according to the Los Angeles Times. Tesla stock rose just over 1% in after-hours trading, while SpaceX shares rose above 5%.

Technology rationale and deal structure

Musk supports a combination. He cites complementary work in superintelligence software, chip design, robotics, connectivity and related infrastructure, and says closer cooperation could offer gains.

Separately, Ars Technica’s analysis argues that a combined company would most probably prioritize AI and computing power over Mars settlement and mass-market cars.

The companies already have financial ties. NBC News, citing company disclosures, reported that Tesla announced in January that it was investing about $2 billion (£1.5 billion) to acquire shares in an AI startup that is a SpaceX subsidiary.

Tesla completed an approximately $2.00 billion (£1.5 billion) investment in SpaceX shares on March 12, 2026, according to its proxy. The proxy says SpaceX’s merger with xAI Holdings converted Tesla’s right to buy xAI Holdings shares into a right to buy SpaceX shares.

The potential transaction could take either a SpaceX-led or a Tesla-led form.

**SpaceX-led deal:** The Verge reported that most Wall Street analysts and legal experts consider SpaceX more likely to acquire or absorb Tesla than the reverse. They cited SpaceX’s higher valuation, saying a SpaceX-led acquisition or stock swap would leave SpaceX shareholders with majority control.

**Tesla-led deal:** If Tesla were to buy SpaceX, The Verge’s analysis identifies a financial risk for Tesla shareholders: their holdings could be diluted, while SpaceX’s spending needs could constrain Tesla’s ability to fund car factories and battery plants.

Tesla shareholder approval requirement

Musk said the special committees were established at shareholders’ request and that he is not participating in their merger discussions because he is a conflicted party. He also said he owns a roughly 20% stake in Tesla, owns a 45% stake in SpaceX, and wields control over about 82% of SpaceX’s voting power.

With transaction terms still unresolved, Musk said a deal could proceed on Tesla’s side only with approval from 50% of all shares—not merely 50% of the shares cast in a ballot. Tesla's annual shareholder proxy report does not include a merger proposal for shareholders to vote on.

Axios reported one analyst’s forecast from Gene Munster: he assigns a 95% chance to a transaction within two years, based on his expectation that shareholders would support it. Musk has cautioned that a deal may not be completed. The terms remain unresolved, and Musk said a Tesla-side deal would require shareholder approval.