Elon Musk said Tuesday, Oct. 20, that the boards of Tesla and SpaceX have each formed a special committee of independent directors to study a possible merger of the two companies. He disclosed it on SpaceX's third-quarter earnings call, a day before Tesla is scheduled to report its own results.
The committees have not agreed on terms, and there is no guarantee they will, Musk said, according to NBC News and Fortune. He said the committees were formed "at the request of shareholders" and that he is not part of their discussions because he is a conflicted party under securities rules. He did not say who sits on either committee.
"I think some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it," Musk said on the call, as reported by Fortune.
He still made the case for it. Musk said there is "a lot of merit to combining the companies," citing AI software, chip design and robotics, along with Terafab, a chip-manufacturing project the two companies are developing together, TechCrunch and NBC News reported.
What a deal would take
Any merger would need support from shareholders of both companies, Musk said. At Tesla, that means a majority of all outstanding shares, not just the shares that are voted, which Musk called "quite a high hurdle," according to Fortune. SpaceX is easier: Musk controls more than half of its voting power, TechCrunch reported, and Fortune put that figure at about 82%.
The numbers would be enormous. Based on Tuesday's closing prices, a combined company would be worth about $3.5 trillion, with SpaceX valued at about $2 trillion and Tesla at nearly $1.5 trillion, Fortune calculated. Musk owns about 20% of Tesla and about 45% of SpaceX and would hold roughly a third of a combined company, the magazine reported. No deal price has been set.
Nothing is on the ballot yet. Tesla's proxy statement for its Dec. 3 annual meeting, filed with the SEC on Oct. 19, lists three items: electing three directors, an advisory vote on 2025 executive pay and ratifying PricewaterhouseCoopers as auditor. The same filing names Robyn Denholm as independent board chair. TechCrunch counted seven Tesla directors classed as independent, including Denholm, Ira Ehrenpreis, JB Straubel and James Murdoch. Ehrenpreis has also served on SpaceX's board since February 2026, according to the proxy.
The two companies are already linked
Tesla already owns a piece of SpaceX. According to the proxy, Tesla agreed on Jan. 16, 2026, to invest about $2 billion in xAI Holdings, Musk's AI company. After SpaceX acquired xAI Holdings on Feb. 2, Tesla's right to buy xAI preferred stock converted into a right to buy SpaceX Class A shares, and Tesla completed the roughly $2 billion purchase on March 12. Tesla also booked about $143.3 million in revenue from SpaceX in 2025, mostly from vehicle sales.
SpaceX arrived at the call with strong numbers. In results filed with the SEC, it reported third-quarter revenue of $14.6 billion, up 161% from $5.6 billion a year earlier, and net income of $4.4 billion, compared with a $1.1 billion loss. Its AI segment, which SpaceX calls Super Intelligence, brought in $7.56 billion, more than the $5.25 billion from its Starlink-driven Connectivity segment. SpaceX shares rose more than 5% after the analyst Q&A, and Tesla gained just over 1% in after-hours trading, Fortune reported.
What it means for Tesla owners and shoppers
For people who own a Tesla or are shopping for one, nothing changes today. There is no agreement, and any combination would need a shareholder vote that has not been scheduled. The bigger near-term question is Tesla's own quarter: the company is set to report third-quarter results after the market closes Wednesday, Oct. 21, with a 5:30 p.m. Eastern call, according to MarketBeat, and analysts are likely to press executives on the merger idea.
Tesla did not immediately respond to Fortune's request for comment.
